Financial Statement: The Crucial part of an Organisation

Everybody regardless of their profession, have to deal with numbers. The business world is enveloped in equations, ratios and formulas. It can be a living nightmare or you can beat the fear once and for all. So here lies the importance of financial statement to get your business financial structure in place. It is definitely not the exciting part of your business; however, keeping financial statement up-to-date is an important aspect of a business.

Financial statement includes balance sheet, income statement and cash flow report. As an owner, you should know where your cash is going? How much is required to cover a month of expense? But is that possible for you to cover these important aspects alone? Well, it is definitely not. A business accountant can help you produce your business financial report to give you an idea whether your business is doing well or not.

Let us take a close look at the three essential tools that reflect the financial status of your business:

Balance sheet

A balance sheet report is prepared to capture the financial health of your business at a particular moment in time. It shows your company’s assests, liabilities and equity. Assests are the things you won, liabilities are the things you owe and the remaining balance is equity. This is the value of your investment. A balance sheet shows the value of your business in terms of selling your assests to pay off your liabilities. When you need financing, the first thing any bank would ask is your balance sheet in terms of assests than liabilities as well as equity amount to show that your business has had profit to retain.
The balance sheet details what a business owes, what a business owns and what a business is worth and how shareholders finance the business.

Income statement:

The income statement report shows the profit and loss for a particular period of time such as a month, quarter or year. Income statement provides a lot of information about the financial position of your business. It lists the business revenue, sales, subtracts expenses and shows whether the company has made profit or suffered a loss.Income statement is valuable in terms of its ability to show flow of revenue, expenses and costs over a long or short period of time. If an income statement is prepared for a month, it shows how much money is brought in and how the expenses of the month looks like. Once you compare the report with the previous statements you can see that some expenses are higher or lower in certain months.
The report will also show if there is any seasonal dips in your income. The income statement report not only shows where you are but also shows how you got there. Most of the companies often use income statement as an overview of company’s results and also use other reports to analyse expense category details.

Cash flow:

A cash flow statement or the blood of your business shows the cash activity of your company for a particular period of time. It is prepared usually for a year. The report shows not only how much profit your business has earned and used for the business operation but also how much money it has made from investing and financing other activities. Investing activities can be selling of machines or other equipment as well as buying other businesses or even investing in stocks. On the contrary, financing activities could be either paying on a loan or getting a loan or selling off your company stock.

Cash flow is the money that moves in and out of your business.

To help you with your business financial statement, you can appoint Wisteria accountants who are skilled and proficient enough to guide you at every stage of your company’s growth. Wisteria has the largest accounting team who are focused on producing the accurate and timely account not only to comply with legal requirements but they also act as an important management tool.

Hiring a Freelance Bookkeeper: What does it Cost?

In business, the main goal is to make a profit. Unfortunately, not properly keeping up with the books can eat away at any profit a business might otherwise have gained. Keeping accurate records of expenses and outstanding debts is crucial to the success of a business. Many business owners find it is helpful to hire a bookkeeper to help in that area. Bookkeeping services in Melbourne can vary widely in cost however; here is an estimate of what it would cost to hire a good free-lance bookkeeper.

Bookkeeping rates will vary based on several factors. Depending on the amount of education a bookkeeper possesses their fee will change. For example, a bookkeeper with any accountant degree will charge considerably more than a bookkeeper who does not have a degree. Nevertheless, a bookkeeper who has considerable experience yet no degree is still a very big asset to a business.

Freelance Bookkeepers typically are paid two different ways a flat fee or hourly. Usually bookkeepers prefer an hourly rate until they are familiar with the duties required by the hiring business. After they have become familiar with what their duties will consist of then most will switch to a flat fee for their services.

What should a business expect to spend for a freelance bookkeeper? If a bookkeeper has experience yet does not have any kind of degree or certification, they will typically charge $35-50 an hour for standard bookkeeping. A business can expect to pay more for a bookkeeper with a CPA because this will mean a licensed professional with strict credentials will review the business records. Nevertheless, in hard economic times rates are always negotiable. However, remember if a business is trying to save money by hiring a cheap bookkeeper, they may find that their books are not handled as professionally as they would like. In other words, a business gets what it pays for.

Remember that the average business has 200-400 transactions a month, which can become very time consuming. When considering a freelance bookkeeper a business must consider that if they could stay on top of their records themselves, they would have been accomplishing that already. If there is “sticker shock” over bookkeeper’s rates, recalling that fact can help.

There are a few ways a business can make a bookkeeper’s job easier and in turn cost less. They include keeping business receipts in date order, organizing receipts into categories, and not folding receipts. In addition, a business should never try to lie or mislead a bookkeeper about business records. If a lie is ever found out, the bookkeeper will likely refuse to work with that business ever again.

Hiring a bookkeeper is a wise move for a business to make to assure their financial books are always in order. Bookkeepers are well worth their fee to any business. Businesses should look at a good bookkeeper as an investment in wealth growth because they can help a businesses keep better track of money, simply by keeping exceptional records.