Mastering Small Business Financial Reporting

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Mastering Small Business Financial Reporting
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What are financial reporting standards for small
businesses?
Most small businesses in the United States
utilize Generally Accepted Accounting Principles
(GAAP), established and maintained by the
Financial Accounting Standards Board (FASB), as
their financial reporting standards. Most other
countries use International Financial Reporting
Standards (IFRS), which was established by the
International Accounting Standards Board
(IASB). U.S. GAAP is a set of accounting rules
to guide the preparation, reporting, and
presentation of financial statements. Following
basic GAAP standards helps organizations ensure
accurate, consistent and transparent financial
disclosures.
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• Under both U.S. GAAP and IFRS standards, some of
  the most common types of financial reports for
  small businesses include
• Balance sheet A balance sheet provides a
  snapshot of a companys financial standing at a
  specific time, detailing the companys assets,
  liabilities, and shareholder equity.
• Profit and loss (PL) statement Sometimes called
  an income statement, a PL is a statement of
  comprehensive income and expenses over a specific
  period of time, indicating whether the business
  made a profit or a loss during that time
• .

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• Statement of cash flows A cash flow statement
  details the amount of cash and cash equivalents
  entering and leaving a company, highlighting
  where a companys money comes from, how its
  spent, and liquidity at a specific time.
• Annual report A statement of financial position
  that shows a summary of the companys operations
  and financial conditions after a fiscal year,
  typically including each of the documents above
  as well as other insights from key company
  stakeholders.

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Why are small business financial reporting
standards important?
That last section was heavy on terminology, which
can be intimidating for some small business
owners. Many entrepreneurs do get by with less
formalized small business reporting standards,
but following GAAP or IFRS is important for two
major reasons planning and compliance. Financial
reports provide deep insight into your
business's health. Looking at your business bank
accounts balance on a given day isnt exactly
savvy financial sleuthing. Keeping detailed
financial reports provides a conceptual framework
for business owners to understand how the
business is doing and optimize a business plan.
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Top tools and tech for financial reporting

• Financial reporting can be time-consuming and
  challenging. Fortunately, there are many tech
  tools on the market that leverage financial
  instruments to streamline the reporting process.
  Technology can help
• Automate rules-based data collection and entry.
• Visualize financial data for easier
  understanding.
• Provide real-time financial reporting for
  up-to-date analysis.
• Integrate with sales and purchasing systems,
  customer management solutions (CMS), and other
  technology you use to operate the business.

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• Tipalti Includes integrated billing and
  invoicing but lacks annual reporting
  capabilities.
• Planful Excellent for creating financial reports
  but lacks bank reconciliation or invoicing
  features.
• Dataralis Designed for businesses that work in
  Excel, but may be too complex for others.
• Xero One of the most robust financial planning
  and reporting tools, but on the more expensive
  side.

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How to use financial reporting insights
Financial reporting software or an accountant can
help you figure out the most important numbers
for your review and visualize data in ways that
make sense. Looking at how financial information
changes over time, along with the narrative
context youve added, will help you understand
how certain decisions have impacted business
results. That will inform your decisions going
forward. Very lean businesses with just one or
two decision-makers may review financial reports
once a month to analyze the previous months
financial performance and focus in on broader
numbers like gross profit, expenses, and net
profit.
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Why Choose Biz2Credit?

• Trusted partner for franchise funding
• Biz2Credit was founded in 2007 and has provided
  more than 10 billion in loans.
• Dedicated support team
• Tailored financing solutions

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