C.E. Thorn, CPA, PLLC, with almost 30 years of small business accounting can provide financial statement preparation for your small business. Our accounting firm can produce monthly financial statements, which is necessary for tax preparation.
Why You Need Proper Financial Statements
Having accurate financial statements can help you make informed, knowledgeable decisions about your business. Financial statements provide an in-depth look at the financial health of your company. The financial statements we prepare can be used for the following:
- End of the year tax purposes;
- Whether your business is financially prepared to expand;
- If it's time to hire additional staff;
- Over time, you can use these reports to create budgets, forecast periods of high revenue or downturns, and create a path toward growth.
In addition to using these for your personal analysis, if you plan on borrowing, or working with investors, they'll need to see these statements to help them determine the financial health of your business.
Financial Statement Preparation
We use your financial records and information to compile several types of statements that show different aspects of the financial health of your company.
Balance Sheet
The balance sheet, also called the statement of financial position, shows the net worth of your company.
- Assets include your bank account balance, inventory, and assets you can quickly convert to cash. It can also include property, raw materials, and equipment.
- Liabilities include debt and obligations to creditors.
- The net worth or equity is the amount left from the assets after the liabilities are subtracted.
Income Statement
Your income statement, also called the Profit & Loss statement, calculates your sales revenue, income, and expenses. This determines how much profit or loss your business experienced during a set period.
Frequently Asked Financial Statement Questions
What are the four Financial Statements used in small business?
There are four primary financial statements used in small business accounting: the balance sheet, the income statement, the cash flow statement, and the statement of shareholder equity.
- The balance sheet provides a snapshot of a company’s assets, liabilities, and shareholder equity at a particular point in time.
- The income statement shows a company’s revenue and expenses over a period of time, typically one year.
- The cash flow statement tracks the inflows and outflows of cash within a company over a certain time period.
- The statement of shareholder equity shows how much total equity is held by shareholders at a given point in time.
Do small businesses need to prepare financial statements?
Small businesses should prepare financial statements for several reasons. To begin with, financial statements provide information about a company’s current and past financial health which is important for potential investors, creditors, and other stakeholders. Second, financial statements are used to comply with tax and regulatory requirements. Finally, financial statements can help managers make informed decisions about where to allocate resources.
If you are based in Raleigh, Apex, Cary, Fuquay-Varina, Holly Springs, Garner, Knightdale, Morrisville, Rolesville, Wake Forest, Wendell, or Zebulon, C.E. Thorn, CPA prepares financial statements for small businesses which are always accurate and always in complacence with current tax rules. Feel free to give us a call at 919-420-0092.
What two financial statements are most critical to small businesses?
There are two primary financial statements that small businesses should focus on to prepare for accounting purposes: the balance sheet and the income statement. A balance sheet is a summary of financial balances, including assets, liabilities, and stockholders’ equity. An income statement shows revenues and expenses for a set period. While both the balance sheet and the financial statement reveal a business’s health and finances, an income statement shows profits and losses over a certain period of time, such as a quarter of the fiscal year. A balance sheet is a snapshot of of financials for a specific time.
Does a small business need a balance sheet?
While a balance sheet is not required to operate a small business, it is highly recommended. However, a balance sheet is one of the key financial statements that businesses use to provide insights into their overall financial health. The balance sheet showcases a company’s assets, liabilities and equity at a specific point in time. For small businesses, having a balance sheet can give insights into whether the business is currently operating at a profit or loss, and whether it has the financial resources to expand or pay down debt.
What are the main uses of financial statements?
The main uses of financial statements are to help a company make decisions about where to allocate resources. They also help to provide information to potential investors so they can make informed decisions about whether or not to invest in the company. Financial statements also play a role in assessing a company’s creditworthiness.
Contact Us for Financial Statement Preparation in Raleigh
For financial statement preparation and monthly business accounting services, reach out to our CPA firm today at 919-420-0092 or complete the contact form below.