Using a business financial statement template is one of the easiest ways to start an accounting program. These templates can be easily used on your own with no specialized knowledge. They are generally presented in easy to understand steps you will need to follow to complete the presentation.
In using a business financial statement template, you will not only be able to learn how to create a report of your business, but you will also be able to see how to make comparisons between two reports. By creating a complete comparison between two financial statements, you will be able to have an idea of what’s going on. For instance, if there is a difference in the report of sales and the report of expenses, you will be able to figure out the cause.
The purpose of a financial statement is to show the results of business operations over a specific period of time. It will consist of several sections, each listing the financial information of the company. You can use any of these sections to answer the question “What happened?”
The first part of the financial statement is a profit and loss statement. This part details all of the money made or lost by the company, as well as how much of that money was profit or loss. It will also include revenue, expenses, assets, liabilities, assets sold, and surplus or deficit.
The second part of the business-financial statement is a statement of financial condition. This is a critical part of the financial statement because it shows how the company handled cash flow throughout the year. If the company is in the red, this part will show it on a balance sheet. However, if the company is in the black, the financial statement will show an increase in cash flow.
The third part of the financial statement is inventory. It shows the amount of money spent on inventory and the amount of inventory remaining. The inventory may include both incoming and outgoing inventory, whether they came from outside sources, and the length of time the inventory was used.
The fourth part of the financial statement is accounts receivable. Accounts receivable shows the cash that the company has outstanding that was not received. This is usually the cash that was intended for customers but was not received due to insufficient funds. It is also the unpaid accounts of customers who have moved on to other sources.
If you want to learn how to prepare a business financial statement, the use of a business financial statement template will be necessary. When creating this financial statement, it is important to make it simple to understand. If you do not make it simple, you may not be able to complete it on your own.