What Is It? This lists out all of your assets (cash, inventory, receivables, etc.), liabilities (amounts owed to suppliers, bank debt), and equity. These balances are as of a point in time and can be thought of as a snapshot of your business.

Why is it important? First, a balance sheet communicates the overall health of the business, as well as its ability to pay its obligations as they come due. The balance sheet also offers the ability to see how long it takes the business to collect its receivables, and how long it takes to pay its payables. Finally, balance sheet preparation enables businesses to see whether the level of inventory is supported by the operations of the business.

What Is It? This is a comparison of accounts on your balance sheet to an expectation of what they should be. Any differences are then investigated.

Why is it important? You can't know how well your business is doing without reconciling your balance sheet accounts. This is because some accounting entries get hung up in the balance sheet, when they should really be hitting the income statement. Reconciliations can help identify and prevent fraud, such as embezzlement or kick backs. Finally, it provides a list of checks that haven't cleared the bank yet, so you know your true cash position.

What Is It? This is a list of all of your revenues and expenses for a specified period (month, year to date, annual, etc.) to calculate net income for the period. This report shows the activity of the business during the period.

Why is it important? By using a consistent method of developing a P&L, we can help you trend revenues and expenses. You can measure expenses based on a % of revenue, and look for periods when expenses are higher than normal. P&L provides the basis for your annual budget, and is necessary to compare to the budget on a regular basis.

What Is It? A cash flow statement presentation shows the sources of cash inflows and outflows for a specified period. This statement separates cash activity by the following categories: Operations, Investing, and Financing.

Why is it important? A cash flow statement will show whether your operations are producing cash, or burning cash. You will be able to see cash related to inventory purchases and sales, cash related to receivables and payables, and cash spent on fixed assets, such as vehicles, buildings, and other capital assets. Your company might be profitable but still burn cash—this statement will determine whether you will have a cash shortage in the future.

What Is It? A review of your Company's internal processes to determine where there may be risks of theft, general business risks, or inefficient processes

Why is it important? Internal controls are what run in the background of your business. You have internal controls in place, whether you know it or not. However, some controls help your organization run more smoothly, and some controls merely gunk up the system, causing you to spend needless dollars, waste precious time, and spend your nights lying awake in bed worrying about your business. The difference between having good internal controls and bad internals is significant. Good internal controls translate to employees knowing what to do and when to do it (improving employee retention). They protect your hard-earned assets (saving you money and time) and help you remain compliant with financial reporting. Bad internal controls create confusion and employees not knowing who's doing what and when, leave your assets vulnerable to theft, and can create multiple issues with tax authorities or other regulators.

What Is It? Projections or budgets based on past performance, industry benchmarks, changes in vendors or other supply chains, and other financial knowledge pertinent to your business. These can be used to make critical decisions to maximize revenue and minimize expenses. 

Why is it important? Projections and budgets help you look ahead and behind in your business. Projections are forward-looking and help you to know where your business is going and how it is going to get there. Budgets help you track your progress on your way to your goals so you know where to make changes to stay on the path that was set out.

What Is It? Take your accounting from a cash basis (what has currently been spent and received from your business) to an accrual basis (what your business has earned and what it owes as of a given date).

Why is it important? Often, when you make a sale, you do not receive money right away. You get paid in a couple of weeks or maybe a month. Cash basis would say there is no revenue for your business when the sale is made. Accrual basis would say that the sale has been made and someone owes you money. Similarly, when you meet with your attorney, a cash basis would say there has been no expense until you pay that invoice, but an accrual basis would say you incurred an expense. Cash basis is much easier to track, but accrual basis is a more accurate picture of where your business stands. In addition, accrual basis is required by generally accepted accounting principles accepted in the U.S. Accrual basis is the accounting language that banks and investors use to understand your business.