What are financial statements? The basics are a Balance Sheet and an Income Statement (or a Profit & Loss statement). You should know on a monthly (or at least quarterly) basis where your business stands financially. Here are some of the benefits of getting regular financial statements:
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You can get a clear picture of your enterprise’s financial health on a regular basis. You can better track your business expenses by ensuring you are sticking to your monthly budget & seeing if your business is growing as planned.
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You can catch problems early in the year and be able to correct them before the year is over. You can compare monthly performance to other months.
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Financial statements can answer questions like: Why did my business do better or worse last year at the same time? Does my business have peak times? Has the growth of my business stagnated? Why?
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Monthly financial statements are a great tool for every-day financial planning for your business.
