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The 5 Most Important Financial Reports for Your Small Business

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When it comes to small business accounting, most people know that it is important to keep your records updated for taxes. However, there are many more benefits from small business accounting that you can use to grow, improve and expand your business. Here are some of the most important accounting reports for your small business that you should know about.

Accounting Reports for Your Small Business


Profit and loss statement/income statement:

The most important report for any business is the profit and loss statement, also called a P&L or income statement. This report tells you how much money a business makes, as well as a lot more. A well-run bookkeeping operation includes details for where you spend and where your money comes from. For example, I can look at my P&L for a quick summary of how much I make from writing, how much I make from advertising, how much I spend on business travel and how much I pay for computer and internet costs. Each business would have different accounts for its own income and spending categories.

Balance sheet:

A balance sheet gives you a snapshot of what a business has and owes at any given time. For small businesses, assets typically include things like bank accounts, accounts receivables, and possibly an investment account. A balance sheet may also include assets like property, computers, equipment and other saleable physical and intangible property. Liabilities generally include things like credit cards, business loans and anything else your business owes.

Accounts receivable aging:

You don’t work for free, and your business isn’t a charity. Doing the work and sending the invoice is just part of the battle. You also have to make sure those payments get paid and collected. Your accounts receivable (A/R) aging report tells you how well you are doing on the collections side. Look out for customers who are perpetually late, usually pay on time and recently started paying late, and growing late balances from any customer.

Read More: The 5 Most Important Accounting Reports for Your Small Business

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