Creating financial reports might sound intimidating for beginners. However, having clear and accurate reports is essential for monitoring your business’s financial health.
Financial reports help you understand your income, expenses, cash flow, and net profit. To help you get started, here are 7 easy ways to create financial reports for beginners.
Types of Financial Reports
Financial reports are important tools businesses use to assess their financial performance. But not everyone is aware that there are various types of reports used for different purposes.
Here are some of the most common types of financial reports:
Income Statement
An income statement shows a company’s revenues, costs, and profits or losses over a specific time period. It provides insights into how well the business performed during that time.
Balance Sheet
A balance sheet outlines a company’s assets, liabilities, and equity at a specific point in time. It gives an overview of the company’s financial standing and how much has been invested in the business.
Cash Flow Statement
The cash flow statement records all cash inflows and outflows over a certain period. It helps businesses track their cash movements, including where it comes from and how it's spent.
Statement of Changes in Equity
This report tracks changes in the company's equity over time. It includes owner investments, retained earnings, and other adjustments affecting equity.
Retained Earnings Statement
The retained earnings statement shows profits retained by the company from one period to another. It provides information on earnings not distributed to shareholders.
How to Create Financial Reports for Beginners
Here are a few steps you can follow to create financial reports as a beginner:
Understand the Types of Reports
Before diving into financial reporting, it's important to understand the different types of reports available. Common examples include income statements, balance sheets, and cash flow statements.
Each report serves a unique purpose, and together, they give you a comprehensive view of your business’s finances.
Also read: 5 Benefits of Using a Financial Record App for F&B Businesses
List All Income and Expenses
Create a clear list of all income sources and expenses. Be sure to record every business transaction, including sales, purchases, regular expenses, and operational costs.
Analyze and Categorize Your Data
Once you've listed your income and expenses, analyze and categorize them for easier reporting. Organize the data into categories such as revenue, operational costs, expenses, and investments.
Create an Income Statement
An income statement shows whether your business is making a profit or loss. It compares income with expenses to help you assess profitability.
Create a Balance Sheet
A balance sheet includes your assets, liabilities, and equity. It gives you a complete picture of your business’s financial health—what you own and what you owe.
Create a Cash Flow Statement
The cash flow statement compares the cash coming into and going out of your business. It’s crucial for tracking financial liquidity and ensuring positive cash flow.
Also read: Important! How to Make a Budget Plan (RAB) for Better Business Finances
Use Accounting Software or Apps
To make things easier, consider using accounting apps or software to simplify the financial reporting process.
With accounting software, you can automate data entry and generate reports quickly and accurately. This reduces the risk of errors and saves you valuable time.
Before choosing one, make sure the software fits your business needs. You might want to try Opaper, a business platform that offers simple and fast online financial reporting features.
Opaper comes with intuitive and user-friendly tools, so you won’t need to spend a lot of time or effort creating your financial reports. It also features strong data security to protect your business’s financial information.
By using Opaper, you can stay focused on growing your business without worrying about your financial reports. Try Opaper now to make financial reporting easier for your business!