{"id":2377,"date":"2019-07-26T14:58:43","date_gmt":"2019-07-26T12:58:43","guid":{"rendered":"https:\/\/www.dazzlepop.net\/site\/?p=2377"},"modified":"2019-07-26T14:58:45","modified_gmt":"2019-07-26T12:58:45","slug":"three-accounting-reports-you-should-be-keeping","status":"publish","type":"post","link":"https:\/\/www.dazzlepop.net\/site\/three-accounting-reports-you-should-be-keeping\/","title":{"rendered":"Three Accounting Reports You Should Be Keeping"},"content":{"rendered":"
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At some point or another, you\u2019re going to have to get down with accounting reports. Not the most exciting task, we know, but pretty important. But what kind of accounting reports should you be creating as a small business owner? We asked our friends at Xero to walk you through the most common types. And remember, to make accounting easier in general, be sure to link your Square account to Xero in our App Marketplace<\/a>. (This post is for educational purposes only. For accounting advice related to your business, consult a professional.)<\/p>\n\n\n\n

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Accounting reports are powerful documents that provide deep insight into your business\u2019s performance. But unless you have a background in finance, it can be a struggle to make sense of them. Three of the most common are income statements, balance sheets, and cash flow statements.<\/p>\n\n\n\n

Income statement<\/h5>\n\n\n\n

An income statement shows how much money your business has made or lost over a period of time. It generally has three parts: total revenue, total expenses, and net income. The hope is that revenue is greater than expenses, resulting in a positive net income.<\/p>\n\n\n\n

The purpose of an income statement is to get an overview of everything that influences your bottom line. All the sources of revenue and expenses \u2014 from both operating and nonoperating activities \u2014 should be listed so stakeholders can get a clear understanding of why the net income figure is what it is.<\/p>\n\n\n\n

Balance sheet<\/h5>\n\n\n\n

A balance sheet provides a snapshot of your business\u2019s financial position at any point in time. This report also has three sections: assets, liabilities, and equity. The value of assets should equal the combined value of liabilities and equity.<\/p>\n\n\n\n

Example: 
Say you\u2019re starting a landscaping company. You accept a $10,000 loan, which is a liability. The entire amount goes into your bank account, giving you an equal $10,000 in assets.<\/p>\n\n\n\n

You then spend $4,000 on a lawn mower. Don\u2019t worry, you still have $10,000 in assets because the lawn mower has a monetary value. You take your new equipment and make $1,500 cutting grass. It\u2019s recorded in your equity column as retained earnings and in your assets column as cash on hand. Let\u2019s do a final review:<\/p>\n\n\n\n