At a minimum, the two basic accrual-basis financial statements that should be reviewed monthly are the balance sheet and the income statement.
- The balance sheet effectively shows what the company owns and what it owes at a point in time, with the difference being the owner’s equity in the company.
- The income statement shows operating results for a period of time, broken down by revenue line items and expense line items.
In reviewing the financial statements, management should first ensure that the accounts have been properly reconciled and adjusted so that the information is reliable.
Davis & Hodgdon Associates CPAs have business advisors on staff, able to show you exactly how this is done. Call 802-878-1963 or visit www.dh-cpa.com for more information.