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Posts by astutebookkeeping

Financial Reports

Financial Reporting is essential to any business. Financial reports may consist of numerous different types of reports, but the primary reports are; balance sheet, income statement (sometimes referred to as a Profit and Loss or P&L), and cash flow statement. Business owners should be able to read financial reports. The reports are critical to the operations of the business.

The balance sheet contains your assets, liabilities, and equity. The balance sheet formula is assets=liabilities + equity. It is important that these items are recorded correctly. It is important that the company’s assets and liabilities are correctly recorded. There are numerous factors that depend upon this information such as depreciation of your assets and long term loans. If your company is ever evaluated, they are going to check your balance sheet for the assets and liabilities of the organization. I look at the balance sheet as the long term financial report. This is the report that proves the net worth of the company.

The income statement (P&L) is essential to the operation of the business. The accountant or bookkeeper will

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Why Hire A Bookkeeper?

 

Why should a company or individual hire a bookkeeper? If you ask an owner of an organization or an individual why they hired a bookkeeper, the answers will naturally vary. However, the answer is usually some derivative of knowledge and time. I know that usually people say time and money is the reasons given for most decisions in regard to business or finances, but money doesn’t play as much of a factor in hiring a bookkeeper. Most bookkeepers charge similar rates based upon the geographic region for which they are located. Therefore, the reasoning is usually based upon knowledge and time.

Accounting is not something that is easily understood. There are many guidelines used in accounting provided from Generally Accepted Accounting Principles (GAAP) and Financial Accounting Standards Board (FASB). Accounting is a field that takes years of study and practice. In fact, most people may not realize that in order to qualify to sit for the CPA exam in most states, you must have a set number of hours worked under a licensed CPA. Sometimes, this can be substituted for education. For instance,  

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