There are three basic reports important to your business.
- Income or Profit and Loss Statement
- Cash Flow Statement
- Balance Sheet
An income or Profit and Loss Statement shows where and how money goes in and out of a company for a period of time. Monthly, quarterly and annual Profit and Loss Statements show the financial strength of a company.
The Cash Flow Statement is one of the most useful financial management tools because it shows you exactly how cash is flowing in and out of a business.
The Cash Flow Statement is a guide for business making business decisions such as adding employees or planning major purchases.
A Balance Sheet is a financial snapshot of your company highlighting all major assets and liabilities.