What financial reporting do I need?

As a business owner or executive, there are many reports that will come across your desk that provide information to help you make decisions for your organization. Financial reports contain a wealth of information that can help you analyze how your organization is doing. The four main financial statement types are: balance sheets, income statements, cash flow statements, and statements of shareholders’ equity. However, for the analysis of smaller, private business, we will instead review what we find most useful. We consider these to be the executive dashboard summary, balance sheet, income statement, and cash flow statement. An executive dashboard summary is custom-built on metrics that are important to decision making, while the balance sheet, income statement, and cash flow statement can be extracted from the organization’s accounting system.

Executive Dashboard Summary

What is an executive dashboard summary? It is a management and reporting tool that summarizes key performance indicators and provides a high-level and strategic overview of how the organization is performing.

An executive dashboard summary can be as simple as a few key metrics on an excel spreadsheet that is updated on a regular basis, or it can be a more custom-built dashboard created from the accounting system, or a third-party system. It should be high-level, and contain visuals for faster information absorption.

What metrics should be included on the dashboard? This is an individualized decision, and should contain answers to questions that consistently come up. As a CEO, you may want information regarding operating expense ratios, net profit percentages, or department efficiencies.

Balance Sheet

The balance sheet provides a snapshot of an organization’s financial health for a point in time. It lists the assets, liabilities, and equity, and is typically broken down by current and noncurrent.

Income Statement

The income statement presents the income and expenses during a period of time. The income statement is typically viewed monthly, quarterly, or annually, and allows businesses to compare trends in income and expenses over time.

Cash Flow Statement

The cash flow statement shows the inflows and outflows of cash for a period of time. The cash flow statement is broken out into operating activities, investing activities, and financing activities. Operating activities are activities that are the normal business’ activity, whether that is services or the sale of goods. Investing activities are activities from purchasing or selling asset. Financing activities are debt and equity activities.

Information is power. Use your power wisely.

Contact us today at kaolee@cfodirectllc.com or call us at 678-571-5036 to help you compile and/or create financial reports that will propel your business forward.