A simple financial report will describe the condition of a business and can also be used to evaluate a business. For those of you who are new to running a business, you need to make a report even if your business is small or large. Why? Because without a financial report your business will be difficult to develop.
Financial Report Function
Financial statements are the same as financial records of profit and loss records, income records, expense records and so on. Reports are needed to keep the business running. The following are some of the functions of financial statements.
1. Business Responsibility
In a business certainly involves several people including outsiders. For example to investors, customers or to the government such as for business taxes and so on. The more detailed the financial statements that are made, the more credible your company will be in the eyes of outsiders.
A financial report must be prepared in detail and based on the truth, not arranged in a messy and careless manner. Because this can indicate that your business cannot be accounted for and will have problems in the future.
2. Evaluation Material
Evaluation is very necessary in a business. Business evaluation will be carried out by looking at the simple financial statements that have been made. These financial reports can be used as parameters for success, progress, problems, and solutions to be obtained.
Looking at the financial statements, you will fix the cause of the problem with solutions that can be obtained also from the financial statements. With the financial report as an evaluation material, it is hoped that problems that have occurred can be overcome and will not recur.
3. Assessing Business Conditions
The financial report as an assessor of the condition of the business is intended for you to easily see the loss or profit of the business. If the financial statements are recorded as continuing to lose money, then the company is experiencing a setback, it could even be threatened with bankruptcy.
On the other hand, if the financial statements show an increase in profits and profits, the company is growing. From here you can find out the condition of your business and determine what actions to take if the company is threatened with bankruptcy or growing rapidly.
How to Make a Simple Financial Report
Financial statements have several functions above which are very helpful in running a business. Financial statements are also an information in decision making for the company. Here are some ways to make simple financial reports.
1. Create a Financial Statement Notebook
Record and collect a financial record such as sales, purchase, or debit receipts, all of which need to be recorded and a notebook. In the world of accounting, a business financial record book is usually called a general ledger.
In this book of financial statements the contents must be detailed and complete. Starting from the date, record number, and information such as entry and output. Not only income and output, accounts payable, balances and profits also need to be recorded in this financial statement book.
2. Record Income and Expenses
Making a financial statement book is not enough. You need to record every time there is income and also expenses, even in small amounts. In addition to income and expenses, you also need to record accounts receivable. Because it affects too.
With the records of income and expenses that are made in detail and detail, it will help determine profit and loss. In addition, you can also measure employee salaries and earnings on a daily, monthly or yearly basis.
3. Create a Master Cashbook
After creating a notebook and recording all the income and output, you need to create a master ledger. This is important, because you can combine the two notes above. With this main ledger, all records of income, expenses, and receivables will be in one.
This main cash book is used to compare and measure the amount of income and expenses. With this main ledger you can implement new strategies based on comparisons through the main ledger.
4. Create a Stock Book
In addition to recording finances, income and expenses, you also need to make a stock book. Although it seems trivial, this book is very important and should not be missed.
This stock book is used to record what items come in and go out every day. Similar to financial records, the recording of this stock of goods also needs to be done in detail. So that you know what types of goods are in the business.
5. Create a Goods Investment Book
Do you know what an inventory book is? When the items you have can last longer than 3 months, such as tables, windows, and so on. This is not included in the recording of the inventory book, but is entered into this inventory book.
Although this book is used to record goods in the long term, but this book is very important. In addition, this inventory book is also used to record donations, and durable grants.
Business Financial Report Recording Application
Financial reports have a very beneficial function for your business. Making it is also quite easy for those of you who already understand a little about accounting. Even though just making simple financial reports, it will certainly feel difficult. Especially when you don’t really understand business finances
In this modern era, making simple financial reports is very easy. Because there are many financial applications that are present to help record the financial statements of the business or business that you are running.