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Do you understand your financial statements?
Bruce_C49
Member Posts: 38
This is a rhetorical question. As an accountant we prepare financial statements; we understand accrual accounting and where things go. Does the boss understand the numbers? No! That is why I always prepare an accompanying Word document to accompany the statements. There should be no more than 3-5 key metrics (benchmarks) that you and your boss review.
Do you understand your financial statements?
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Great comment @Bruce_C49! We see so many small business owners at Wave who initially believe that bookkeeping/accounting is only about being ready for tax time. We passionately believe that the main purpose should be to _understand_ your business, in order to make good decisions and become more successful.
Your approach to provide notes and interpretation is so helpful to management. For small business owners that don't have an in-house bookkeeper or accountant, however, getting access to this kind of help is one of the best reasons to hire an accountant.
Alternatively (or additionally!) Wave's accounting guide Fearless Accounting with Wave is a great introduction to Management Accounting for those that would rather do it themselves.
Have a great day!