Of course, it’s hardly necessary for everyone to be thoroughly versed in financial law- that’s why we have bookkeepers and accountants, after all! However, in the end [and under tax law] we are all fully responsible for our financial affairs, so it’s absolutely vital that you keep on top of what’s being done on your behalf. It’s vital you have the pertinent financial information to hand, so you can evaluate what you’re being told by your financial personnel. read more about financial personnel at https://financial.ucsc.edu/Pages/default.aspx
Here are some tips on what you need to receive regularly.
Remember that these documents are prepared regularly- you need to be seeing these at least once a year, if not more then that. If you’re not offered them as a matter of course, you must ask for them. However, if you’re Melbourne based bookkeeper is not giving you these documents regularly and encouraging you to engage with the data they produce, then you should consider finding a different firm. All financial personnel you engage to work for you should be encouraging you to keep your own financial affairs a priority in your personal and daily life, not discouraging you.
Balance sheets are just one of the documents you need from your Bookkeeper.
It all starts with the balance sheet. The balance sheet helps you to calculate profit and loss, determine the amount of money you hold and more. It’s the kingpin foundation stone of determining your financial position, and also the very first document in the process of creating a full set of financial statements- they’ll all be drafted based on the information in this particular document. It lists your assets [the stuff you own, from cash to plant equipment] liabilities [the stuff you owe] and the equity held by the company [equity being the capital after the paying off of liabilities].
Income statements must always be given to you.
Bookkeepers in Melbourne and elsewhere will all agree, click here for more information about bookkeepers, the income statement is the next most vital financial document you need. This shows you your profit and loss over the period of the document. It’s also a great way to get a handle on expenses of the business like rent or wages. Obviously, this is the sort of information it’s essential to know to make your business profitable and to determine how you are doing financially.
The last document you need to assess your financial affairs.
The last vital document your bookkeeper should give you would be the Cash Flow Statement. This may sound similar to the income statement, but it is actually a summary of the way your assets have moved over time- that’s all assets, not just cash. You can see what was spent, invested or applied to financing. You’ll also be able to see what as been invested in debt or paid off.
Although you’ll rely on your Melbourne bookkeepers to handle your financial affairs, these three documents will be a vital part of you accessing that data for yourself, and should be given to you whenever you request.