Detailed financial statements in small business bookkeeping may seem like a waste of time. When we’re talking about smaller dollar amounts, does it make a difference? Does it matter whether we use the same practices as major corporations?
To answer that question, it’s worth asking another: how did the big companies get so big? There are many possible answers. One thing they all have in common, though, is rigorous attention to financial detail.
Turning a Good Small Business Into a Great One
In his now-classic book, Good to Great, author and researcher Jim Collins lays out his findings for several major corporations. He talks about how they went from being good enterprises to becoming great ones.
Every company his team studied that succeeded in going from good to great used disciplined thought in their operations. One component of such discipline is the willingness to confront the most brutal facts about the reality of their situation as a business.
Are there any facts more brutal than what’s written in the accounting ledgers?
The Truth Will Set You Free
Of course, the ledgers themselves are raw data and a lot of it. Even the owners and managers of small businesses don’t have time to pore over them in their basic form. The data needs organizing and clarifying.
That’s the reason financial statements exist. Financial statements in small business bookkeeping are a crucial way to distill a mountain of ledger data into a digestible report. All the facts are still there, but combined.
Making that that combination still takes time and resources, of course. Someone still has to enter the ledger data in the first place.
Automation of some processes makes it faster. That’s still not the ideal way for CEOs and managers to spend their time, though.
What they need is a way to be free to make more decisions based on better information.
Enter the bookkeepers.
Creating Financial Statements in Small Business Bookkeeping
Balance sheets, income statements, and cash flow statements each serve a distinct function. They show a company’s financial position from different perspectives. Together, they provide a more complete picture of where the money is and where it’s going.
Bookkeepers can put them together by reviewing and compiling the ledger data for each accounting period.
The difficulty is the matter of whether to hire an in-house bookkeeper or to work with a local specialist firm.
The former option comes with a lot of overhead. As a business continues growing, that becomes less and less of an issue. For small companies, though, it can be a crippling burden to hire a new staffer before you’re ready.
SyncLedgers makes creating those essential financial statements in small business bookkeeping much simpler.
A real-time picture of your finances could not be more essential or useful when making decisions about the future. You’ve also got to know the past trends and how they relate to right now. That’s why as part of our bookkeeping services, SyncLedgers provides profit and loss statements, balance sheets, and customized dashboards. This all makes it so you can track the key performance indicators that matter most.
Our local bookkeeping solutions are excellent for startups of all kinds. Contact us today so we can start providing you with clearer access to the truth about your business!