Why do companies need timely and accurate financial statements?
CEOs and business owners need to be always in the know about cash flow, sales growth, profit margin changes, and administrative costs. Managing a business requires its leaders to be constantly monitoring its “vital signs”.
Financial Statements consist of Balance Sheet, Income Statement, and Statement of Cash Flows. They are more than just accounting exercise for tax reporting. Like a pedometer and a heart rate monitor, monthly reports are a key tool that allows management to measure how they are performing and where they need to improve or spend more time focusing.
A Balance Sheet provides a picture of a company’s assets, debt and ownership value at a point in time; i.e, the ability to see what you are worth.
An Income Statement provides a picture of the revenue and expense flows during a particular period of time between two balance sheet points. It tells a CEO about the company’s ability to generate profit at the present time.
A Cash flow Statement provides the uses and sources of cash, whether from operations, financing, or ownership investment. Cash flow is the blood for keeping a company alive. Focusing on cash flow is important since cash flows do not always match the revenue and expenses of an organization. For example, you can be making a profit but not generating cash or obtaining cash through leverage to fund on going losses. In this situation, a CFO can perform its liaison function to bring in bankers and secure loans that will avoid an “anemic” situation for a company.
Smart business owners need accurate and timely financial statements to understand where their companies are at, stay on top of its operation and growth their businesses. As a consulting CFO at a2z CFO LLC, with more than 30 years of experience and strong accounting expertise, we are the right and left hands to CEOs and business owners of family offices, small businesses, and non-profit. As your “family doctor”, we provide “EKGs”, “blood tests”, “vital signs” of “heart rate”, “blood pressure”, and all relevant numbers and statistics, to make sure that your business is in good shape, and on the right course for healthy growth. We are your “co-pilot”, “navigator”, guiding your companies in the right direction.
We keep your ship on course.