What is Financial Reporting?

As a small business owner the thought of financial statements and/or financial reporting may seem challenging for you to understand.  Don't allow that fear to keep you from reading this article.  As an entrepreneur, understanding your very own financial statements, just as well as your accountant, is what will help define future goals and success.  Let's take a look at what financial reporting includes and what it means for your growing business? 

Financial reporting includes the following:

• the external financial statements (balance sheet, income statement, statement of cash flows, and statement of  stockholders' equity)


• the notes to the financial statements


• press releases and conference calls regarding quarterly earnings and related information


• quarterly and annual reports to stockholders


• financial information posted on a corporation's website


• financial reports to governmental agencies including quarterly and annual reports to the Securities and Exchange Commission (SEC)


• prospectuses pertaining to the issuance of common stock and other securities

​A small business uses cash flow statements to report the inflow and outflow of the business. The inflow is the cash or revenues that come into the business through the sale of commodities; the outflow is the cash used in the daily operations of the business. This inward and outward flow of cash is important to keep a business in operation. Without sufficient inflow, then the business will lack cash to pay for expenses and to purchase inventory or stock.

​To establish your business policy and procedures today, visit our website.  It's never to late to get started!

Source:AccountingCoach

Better understated than overstated. Let people be surprised that it was more than you promised and easier than you said. – Jim Rohn