Business & Financial Solutions
Business & Financial Solutions
TAX HELP SERVICE AND PREPARATION
(855) 557-2222
Get Started Now!
  • twitter
  • facebook
  • linkedin
  • Home
  • What We Do
    • Business Start-ups
    • Accounting and Bookkeeping Services
    • Tax Services
    • Tax Help
    • Specialized Tax Solutions
    • Business Management
    • Specialized Accounting Services
    • Non Profit Organizations
    • Offer In Compromise
    • Professional Content & Business Plan Writers
    • Construction Accounting Firm
    • Accounting & Bookkeeping for Restaurants
    • Bookkeeping Services Assisted Living
    • Accountants For Smart Real Estate Professionals
    • Bookkeeping Services for Law Firms
  • About Us
  • Locations
    • Frederick Maryland Office
      • 10 Things Every Frederick Business Owner Should Know
      • 12 Tax Tips For People Living In Frederick Maryland
    • Rockville Maryland Office
      • Rockville Maryland Name One Of The Best Places To Live
      • Top 10 Things To Do In Rockville Maryland
    • McLean Virginia Office
      • 10 Things Every Business Owner Should Know About McLean Va
      • What is Tysons Corner Mall, How Can It Help Your Business
    • Plano Texas Office
  • Contact Us
    • Careers
  • FAQ
    • How To Track The Status Of Your IRS Refund – Where Is My Refund?
    • Ask A CPA, Top Ten Questions People Ask An Accountant
  • Blog
  • Client Portal

A Business Owner’s Guide to Understanding Their Company’s Finances

Understanding the financials of their business is a necessary skill for any entrepreneur. Thorough knowledge of how your company’s financial performance has been in the past can help you make informed decisions about the future. Here are some important terms for you to understand and resources for you to consider.

The Balance Sheet

A balance sheet is a financial statement that reflects the financial position of a company or other entity at a particular point in time. The balance sheet should be read from the bottom line to the top line.

The assets are listed on one side, with the corresponding value on the opposite side. The liabilities are listed on one side, with their corresponding value on the opposite side. The owner’s equity is listed on one side, with its corresponding value on the opposite side. The difference between what an entity owns and what it owes represents its equity (the owner’s interest in that entity). You can get software that can guide you through the process, ensuring you don’t miss any steps.

Income Statement

An income statement is a financial statement that reports on a company’s revenue, expenses, and net income. It is one of the three key financial statements used for external reporting. a snapshot of how well a company is doing financially. It measures the performance of the company by looking at its revenues and expenses. You can get a rudimentary understanding of this by doing some online research or taking some classes either online or at a local trade, tech school, or community college.

Cash Flow Statement

The cash flow statement is a financial statement that provides information about the cash flow of a business. You can use this statement to understand how much money is coming into and going out of your business. The balance sheet and income statement are also important statements in assessing the financial health of your company, but they don’t provide as much detail as the cash flow statement.

Calculating Profit

The profit equation is a simple mathematical calculation that shows the net income of a company. The profit equation is calculated as the total revenue from sales minus the cost of goods sold, operating expenses, and general administrative expenses.

Enlisting Help

Many times, business owners have an excellent handle on the big picture of their company, but once they understand just how complex business financials are, they usually come to the conclusion that they need some help. This is why it is so important to get someone on your team who understands the financials and can help you understand them as well.

It is a common misconception that outsourcing payroll is expensive. It does not have to be. The cost of outsourcing can vary depending on the company you hire and the services they provide. Outsourcing means no need for you to have extensive knowledge of tax or accounting law and no need to spend time and money training employees on how to do taxes.

Structuring your company as an LLC is a task you can do yourself inexpensively. Structuring as an LLC means less paperwork, a lower tax burden, and the protection of your personal assets. If you’re looking for a user-friendly and economical way to file, you can hire a formation service. Visit Incorporation Guru to learn about top formation services.

Outsourcing inventory management can be done at a lower cost than hiring an in-house person. Outsourced managers are trained and experienced in the field, so they can do the work more efficiently than someone who is new to it. Or, you can purchase software that can do the job for you, too. Inventory management software syncs in real-time, meaning you get seamless transactions whether your customers shop online or in your store.

Knowing exactly what your financials entail, structuring your business as an LLC to lessen your paperwork, outsourcing where it makes sense, like payroll, and taking advantage of software that can manage some of the tasks for you means you’re able to spend more time on what you do best, growing your business.

Office Locations In Maryland

5100 Buckeystown Pike Ste 250, Frederick, MD 21704
17 W Jefferson St Ste 007, Rockville, MD 20850

Office Location In Virginia

7918 Jones Branch Drive, Ste 405, Tysons VA 22102

Office Location In Texas

101 E. Park Blvd, Suite 600 Plano TX 75074

About BFS

Visit us in McLean Virginia, Frederick or Rockville, Maryland (Washington DC Metro Area)or Plano Texas

Phone toll free: (855) 557-2222
Fax: (240) 297-1054
E-mail: info@bfswebsite.com

Business & Financial Solutions is a tax and accounting CPA firm. Our offices are located in Fairfax County, VA, Collin County and Denton County, TX, Montgomery and Frederick Counties, MD. Our company is highly motivated in helping individuals and companies (private and non-profit) become successful in start-ups. BFS offers assistance with ongoing small to mid-size business management, consulting, accounting and a variety of tax services.

Maryland, Virginia, Washington DC, Texas
back up
© Copyright 2023 Business & Financial Solutions