Monthly financial statements are crucial tools for businesses to assess their financial health, track performance, and make informed decisions. In the United States, preparing a monthly financial report involves a systematic process to ensure accuracy and compliance with accounting standards. This guide outlines the key steps involved in preparing a monthly financial report.
Gather Financial Data
The first step in preparing monthly financial statements is to gather relevant financial data. This includes information from various financial transactions, such as sales, expenses, and investments. Utilize accounting software to streamline this process, ensuring all data is accurately recorded.
Organize Transactions
Once the data is collected, organize it into relevant categories. Common categories include revenue, cost of goods sold (COGS), operating expenses, and non-operating expenses. Proper categorization lays the foundation for accurate financial statements.
Reconcile Accounts
Reconciliation is a critical step to ensure the accuracy of financial statements. Reconcile bank statements, credit card statements, and other financial accounts to identify and rectify any discrepancies. This process helps maintain the integrity of the financial data.
Prepare Income Statement
The income statement, also known as the profit and loss statement, summarizes revenues and expenses over a specific period. Subtract total expenses from total receipts to determine net income. Ensure that all relevant revenue and expense accounts are considered, providing a comprehensive view of the company’s financial performance.
Develop Balance Sheet
A company’s financial situation is shown in a balance sheet at a certain moment in time. It includes assets, liabilities, and equity. Assets should equal liabilities plus equity, adhering to the fundamental accounting equation. Properly categorize and list assets and liabilities to present a clear financial picture.
Create a Cash Flow Statement
The cash flow statement tracks the inflow and outflow of cash during a specified period. It comprises operating, investing, and financing activities. Operating activities involve the core business functions while investing and financing activities cover asset acquisitions and financing sources. The cash flow statement ensures the company’s liquidity and financial stability.
Analyze Ratios and Trends
After preparing the financial statements, analyze key financial ratios and trends. Some common ratios are liquidity ratios, solvency ratios, and profitability ratios. Assessing these metrics provides insights into the company’s financial health and performance, aiding in strategic decision-making.
Comply with Accounting Standards
Ensure compliance with Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS), depending on the framework used for Monthly Financial Statements. Adhering to these standards enhances the credibility of the monthly financial statements and ensures consistency.
Review and Finalize Statements
Before distributing financial statements, conduct a thorough review. Verify calculations, check for errors, and ensure all relevant information is included. Seek input from financial professionals or stakeholders to enhance the accuracy and reliability of the statements.
Winding it up
Preparing monthly financial statements is a multifaceted process that demands attention to detail and adherence to accounting standards. By following these steps, businesses in the United States with the help of Meru Accounting can produce reliable and informative financial statements, empowering them to make informed decisions and maintain financial transparency.
At Meru Accounting, we provide monthly financial statements that help in the assessment of your business. Regular preparation of these statements is integral to the financial management and sustainability of any organization.
Every business needs to make proper monthly statements for their business to get insight regarding the cash flow. A monthly financial statement shows the revenue earned by the company in a specified month. It shows all the costs and expenses involved in that particular month. In the end, you can find the net earnings and losses of the company. So, monthly financial statements show the losses or earnings done by the business in a particular month. This helps the company to plan the next developmental plans for the business to increase the revenue of the business.
Several small and medium scale businesses in the USA are making the Monthly financial statements in the company. However, some have wisely outsourced this task to other agencies to relieve their in-house task. Many of the companies are now planning to outsource this task to the independent agency to have proper monthly analytical accounting. It will help to provide a proper view of the cash inflow and cash outflow on a monthly basis. Meru Accounting is a proficient accounting firm providing monthly financial statements for the business. Their work has made it simpler for many of the businesses to relieve themselves from this task and achieve efficiency in the work.
Here, are some of the highlights of how Meru Accounting is providing better monthly financial statements by doing nice monthly analytical accounting:
An Automated method of making Monthly financial statements
Meru Accounting has very nice automated tools through which they can automate the generation of the monthly financial statements. It will reflect all the details about the cash outflow for the business and the details about where the cash inflow is there. The manual work involved in making the report will be minimal making it easier for the organization to the statement.
Insight about Cash Inflow and Cash Outflow
The Monthly financial statements generated by Meru Accounting will have detailed information about the inflow of the cash and outflow of the cash in the business. It will help the business to capitalize more on the ways through which they can improve the cash inflow and minimize the cash outflow from the business.
Assist in tax calculation
The automated tools used by Meru Accounting will help tremendously in the proper tax assessment of the business. All the taxing aspects will be automatically calculated as per the tax norms led by the state. It will reduce the extra effort while making the Balance sheet for the business.
Better reporting system
Meru Accounting provides a very nice reporting system for the business. It helps the business owners as well as other management teams to know about the overall health of the business by comparing different statements. The reports are very easy to understand and make it simpler for the different stakeholders of the business to do a proper meeting.
Determine several business details
The Monthly financial statements provided by the Meru Accounting will be very helpful in determining different aspects of the business.
Some of the important aspects of the business include:
– Generation of cash flow makes it simple to understand the sources of cash flow
– Factors impacting the business profitability can be determined easily
– Monthly financial statements will help to determine the other financial ratios easily
These are some of the highlights of Monthly financial statements service provided by Meru Accounting. They have a very good mechanism to determine the monthly analytical accounting for the business. The services provided by Meru accounting aims at providing a high level of efficiency in business. Make your business run efficiently by getting wonderful service from Meru Accounting for financial processing.
