4 Financial Statements to Manage Small Business Finances
Why is understanding cash flow Important?
At the most fundamental level, your company's ability to create value is determined by its ability to generate positive cash flows. Small business stats reflect how getting a handle on your cash flow can mean the difference between success and potential failure:
- In response to Covid-19 impacts, more than 50% of businesses plan to improve their accounting practices and start budgeting to ensure stable cash flow according to a 2020 TD survey of small business owners
- Other studies indicate that a majority of business failures are related to poor cash flow management or poor understanding of how cash flow contributes to a business's financial health
Benefits of preparing financial statements
Financial statements can give you a holistic view of your company's finances and help improve profitability.
- Helps keep you on top of your business's finances and cash flow
- Provides better understanding of the financial strength of your business
- Makes it easier to apply for a business loan and prepare taxes
How financial statements can help you run a profitable business
Shows the money invested into your business by the owner(s) and changes in owners' equity over a period of time.
Small business planning and lending resources
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