Are you an accounting student or small business owner trying to learn the trade? Modern accounting programs can generate a huge number of reports with the push of a button. Knowing which reports to generate and when to generate them is a large part of the secret of success. These reports will help you succeed when you’re on the job or running your own business:
Here Are the Top 5 Reports You Can Get From Your Accounting Software
Accounting Report 1: Profit and Loss Statement – Monthly
Are you actually making any money? It may seem obvious but it’s a very important question. A LOT of businesses fail in the first few years. Often the reason is they don’t pay enough attention to this financial statement. Learning to interpret this report is essential. It sounds simple, but knowing if you’re actually making money is a question you need to ask every month. If you’re not, at least then you’ll have a chance to fix the problem. If you don’t know how to read this report, learn how – this report is like a weather vane for your business.
Accounting Report 2: Accounts Receivable – Weekly
Who owes you money? Cash flow is key to your business’s success. If you don’t have any money coming in, how are you supposed to pay your own debts and live? This report keeps track of who you need to chase up for payments. Failing to keep on top of collecting money from your debtors is a surefire way to business failure.
3. Accounts Payable – Weekly
Who do you owe money to? You’ll probably hate giving money away but you do have to do it from time to time. Using this statement to keep ahead of your debts is essential. If you’re late on payments it can cost you BIG with extra fees and charges. Plus, you probably don’t want to get on the bad side of your suppliers. They’re the ones providing you with the materials you need to make money. Calculate this report weekly and stay on top of your obligations to your suppliers.
Accounting Report 4: Payroll Summary – Weekly
Are you paying your employees? You’ll probably spend more time with your employees each week than your family. They deserve to be paid on time and in full and it’s a key component of keeping your workplace harmonious. Accounting for all the money you owe your employees each week is one way of ensuring you’re always paying them what they’re owed.
This statement contains essential information – pay, tax and superannuation owed to each employee. You need to be putting aside money now for PAYG tax and employee superannuation to pay when it’s due. You need another reason to pay your employees? The Australian Tax Office will slap you with fines if you don’t stay up to date and pay in full.
Accounting Report 5: GST – Weekly
Are you paying your taxes? GST can be a pain to keep track of and calculate. But the only thing more sure than death is the tax bill you’ll get at the end of the financial year. You must have money set aside to pay your taxes or you’ll be in a world of financial hurt. Read this report weekly. Put money aside to pay your GST bill.
Business owners – accounting training is key!
Good bookkeeping and accounting practices are essential for you to stay in business. Whoever is doing your books, make sure they know how to prepare accurate statements.
If you’re doing your own books, invest in bookkeeping and accounting education now. Taking one of the many appropriate accounting courses now will pay you huge dividends in the long term when you’re in control of your money.
Even if you’re employing an accountant or bookkeeper to handle your transactions, learning to understand and check their work yourself is a boon as a business manager.
Learning how to correctly interpret accounting information is also a big help when using that data for decision making, an can help you make better decisions for the direction of your business.
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