Companies that outsource their bookkeeping to a competent accounting firm can rest assured that the finances of the organisation will be well attended to. Two of the statements you should be receiving from your accounting company is a monthly income statement as well as a yearly income statement. You will receive additional statements as well such as petty cash reconciliation, VAT report, debtors statement and others.
Monthly Income Statement
This financial statement from your bookkeeper will indicate the profit or loss your company makes on a monthly basis. This is done when bookkeepers from accounting firms calculate the amount of income your company has received after deducting the amount of money you have used to deliver your products or services.
Yearly Income Statement
The yearly income statement is similar to the monthly income statement provided by your accounting company. It is used to compare the financial history of your company in order to determine whether the sales and profit of your company is increasing or not.
Naturally you will want your company’s profits to increase and when an accounting company creates these spread sheets for you, it will make it much easier for you to understand your company’s financial position.You will able to see if you perhaps need to cut back on your expenses in order to increase your net profit, who may owe you money and who you owe money to.
Managing the accounting of your business by yourself can be very time consuming and challenging if you are not familiar with all the legalities. Accounting needs to follow the correct procedures which are known as GAAP in the industry. This stands for Generally Accepted Accounting Procedures and if you use the accounting services of a reputable bookkeeper you can rest assured that these will be adhered to. Your bookkeeper will also be able to prepare all your financial statements for an external audit. This will make it much easier for the audit firm you use to give an accurate opinion on your businesses financial affairs.