How Important Are Financial Statements For Your Small Business?

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How Important Are Financial Statements For Your
Small Business?
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• Financial statements are incredibly important to
  small businesses, and here are just a few reasons
  why
• To gauge your businesses performance
• Financial statements are what your businesses
  performance will be measured upon, and the best
  and most detailed way in which to show
  stakeholders what the future of your business may
  look like, by communicating your past and present
  performances.

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• Those who are already investing in your business,
  and those who may wish to, will study your
  financial statements to assess the managements
  stewardship of the company, and how viable it is
  as a business. They will also use the statement
  to help them predict your businesses performance
  in the future.
• Potential lenders and those who are already
  lending for your company, will also study your
  financial statement to help them assess whether
  your business is able to repay its debts.

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• Research has shown that when accounting
  information is as accurate as it can be, the cost
  businesses must pay for capital, is decreased.
  When talking about capital coming from investors,
  the lower cost comes from the expected return,
  and in the case of capital from lenders, were
  talking about lower interest costs.
• Your business is your baby and nobody understands
  quite in the way that you do, and for that
  reason, your business can appear as a higher risk
  to outside parties than it is. They then go on to
  seek compensation to cover these potential risks,
  in the form of higher rates for the use of their
  capital.

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• Accurate financial statements may not reduce this
  risk entirely, but they can certainly help
  towards lowering the cost of capital.
• You need financial statements for loans and
  corporate tax returns
• All businesses are expected to produce financial
  statements, and because of the role that they
  play in bridging the information gap, there are
  many lenders out there who refuse to consider
  applications for loans if no up to date
  financials are produced.

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• Bankers will not be concerned about the stresses
  and strains that as a business owner, you may be
  under, and will simply expect a financial
  statement to be produced.
• To ensure that you can make strategic tax
  planning decisions
• If you dont know where your business stands
  financially, then its hard, nigh on impossible,
  to make strategic tax planning successful. You
  dont want to end up paying more taxes than are
  necessary, and paying attention to your financial
  statements will undoubtedly help your bottom line
  whatever your type of business and whatever
  accounting method you use.

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• Aside from helping with planning, financial
  statements are vital for all other aspects of
  taxes, from smoothing the path for the tax return
  process and helping you should you happen to be
  audited.
• Financial statements have an impact on many
  aspects of a small business, and as a business
  owner, youd be wise to heed this and make sure
  that yours are up to date and accurate.

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• Miami Bookkeeping was founded with the purpose of
  helping small businesses outsource the
  time-consuming and tedious work known as
  bookkeeping. For more than 10 years, our company
  has been providing bookkeeping services in Miami
  and Coral Gables for hundreds of small
  businesses. If you are looking for bookkeeping in
  Miami or Coral Gables, contact us today at
  support_at_miamibookkeeping.com