business accounting and
taxation course having financial and accounting knowledge can make a
difference in the success of your business. As small business owners you need
to be able to manage the financials of the business. Hiring good accountants to
perform bookkeeping and accounting of your business can make the difference as
it will make you look organised, accurate and up to date. This will also save
you time and in return you will save money by saving time. It is very important
for or small business owners to know about small business accounting reports
and statements. Below are the main accounting statements and reports:
Annual financial reports:
This report is generally issues by your accountant every
year and it important requirement for your annual tax return.
Business activity statements (BAS) preparation for GST:
BAS stands for business activity statement this statement is
issued by your accountants monthly or quarterly depending on your businesses
transactions. BAS is a form submitted to the Australian Taxation Office by all
businesses to report their taxation obligation. This include entries of debits
and credits of your business. Every activity statement carries a unique
Document Identification Number (DIN). Activity statements can be submitted to
the ATO on paper (mail), by phone, electronically (Electronic Lodgment System
or "ELS") or through the business portal (via a Tax Agent). Small
business activity statement, is important for annual tax return.
Statement of Financial Position (balance sheet):
This statement is also prepared by your accountant annually
and includes all your current assets, non current assets, current liabilities
and non current liabilities. A balance sheet is often described as a snapshot
of a company's financial condition. The main categories of assets are usually
listed first and are followed by the liabilities. The difference between the
assets and the liabilities is known as owner's equity or the net worth of the
company or, the net assets, net worth must equal assets minus liabilities.
Statement of financial performance (profit and loss
statement):
This statement is also prepared by your accountant annually
or quarterly. This includes all your business revenue less all your business
expenses.
The accounting can also include financial analysis of your
business performance and cash flow report.
Cash flow report:
This statement can be done annually or quarterly, these
includes cash going into your business and cash going out of your business. It
is usually measured during a specified, finite period of time. Cash flow is a
generic term used differently depending on the context. It may be defined by
users for their own purposes. It can refer to actual past flows, or to
projected future flows.
The above are the main statement used to prepare small
business accounting records. It is very important to know about each statement
as it is important for your business. I recommend to small business owners to
take a small business course which covers the management of small businesses
including small business accounting, and finances.
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