Things to Look When Managing the Company’s Financial Statements
Every successful business always starts from small businesses that evolved into a large enterprise over time. The first step in the development will be a lesson for business owners to build expertise on the financial statements so that they can lead their company’s financial.
Although it would be very time consuming to understand what their financial statements should be, but it will be very necessary to do. Errors are common, but you can avoid the mess by knowing things that might go wrong in your business accounting as follows
- Accounts Receivable / Collections
There will be a complex process of financial statements between invoice and accounts receivable / collections. Most of the problems originated from the delayed marking invoce as “paid” and the time of receipt of payment. When not checked and updated, there will be plenty left list (outdated) when you want to review.
As a business owner, you should review the list of accounts receivable / collections to determine the income and calculate the amount of tax to be paid. When not done properly, this mess will lead your business to the payment of taxes which builds up and at the same time it will lower your revenue.
- Cash Flow
One of the biggest problems of cash flow management is to mix personal and business finances. So many business people who use one account to both finance. Income and expenditure from two different accounts would create a complicated mess, and it is impossible for you compile them without any prescription or receipts from all purchases or expenses. That’s why you should make a clear limitation to distinguish these entities.
- Managing paperwork
The most important thing of paperwork management in business is keeping recipes. You may have a good habit to always ask for a receipt with every purchase, but the bill will become useless if we fail to prepare them. The exact method to prevent this is to simply use a credit or debit card for business expenses. So although we forgot to ask for a receipt, there will always be availablevrecords for you to see.
- Closing the Books Each Month
The ideal time to make the financial statements is at the end of the month. If you close the report too quickly, the financial statements you get may not having reports required for effective business review. However, if too long, the financial statements you will probably need a variety of resources to make it more simple. The monthly report should have information about all transactions including payment of the loan, the value of each business asset, and so forth.
- Managing Payroll
Even though it looks easy, manage payroll is not a simple thing. Payroll protected by tax rules are complicated, there is even a rule that would punish if something goes wrong. Payroll is not just about salaries, but also includes loans, bonuses, seniority and so forth.
Fortunately now present an ERP software such as Acumatica Cloud ERP which specifically designed for us to generate financial statements easily and quickly. Not only that, this software is also able to handle the various aspects that exist in your businesses so that you can control the business easily and get a more accurate report.