Imagine running a business without knowing how much your money flows in and out of your business. That’s a risky situation for companies that avoid making financial reports. In this blog post, we’ll explore small business bookkeeping practices for financial reporting.

How Does a Bookkeeper Help You with Financial Reporting?

Financial reporting demonstrates the financial status of your company to internal and external stakeholders. This process involves creating financial statements, such as income statements, cash flow statements and balance sheets. Some financial reports are only for internal use, tailored to your business goals and decision-making requirements. However, external reporting for stakeholders such as lenders, investors, tax authorities and regulators has stricter requirements.

Based on the purpose, you may have to meet specific reporting rules. With bookkeeping services in Melbourne, you can be sure that you have accurate financial reports for your company. Bookkeepers can help you prepare financial statements for your business, so you can make informed decisions for your company. You will have an idea about the financial condition of your company through financial reports.

Different Types of Financial Statements

Income Statements

Through income statements, you will come to know about your company’s revenue, expenses and net income per share over a specific time period. Profit and loss statements include revenue from earned interest, operating costs, royalties and strategic partnerships.

Cash Flow Statements

Cash flow statements monitor funds coming and out during a financial year. They compare accounts receivables with accounts payable along with debt obligations, operating costs, and investments. A cash flow statement provides you an insight into the company’s ability to meet financial requirements and fund both operating costs and potential growth. These statements only include cash movements in and out of your company. They may include cash flow from:

  • operating activities like accounts payable, inventory and accounts receivable
  • investing activities like asset sales or purchases, or payments related to acquisitions
  • financing activities like obtaining cash from banks or investors.

Balance Sheets

Balance sheets demonstrate your company’s financial condition at a specific time period to check the net worth and possibility for business growth. They demonstrate assets, liabilities and equity using this formula:

Assets = liabilities + equity

Assets can include liquid cash, property, inventory, accounts receivables, prepaid expenses, equipment and intellectual property like patents or trademarks. Liabilities cover any outstanding balances such as accounts payable, dividends payable and wages payable. Shareholder’s equity is a total asset minus the total liabilities. It demonstrates what the company could distribute to shareholders if they settled debts.

Bookkeeping Best Practices for Small Businesses

Bookkeeping involves numerous services that help businesses grow. In small to medium enterprises, everyone uses bookkeeping services to ensure accuracy and consistency in a business. The following are a few bookkeeping practices followed by a bookkeeper for a company:

  • Choosing the right accounting method is an important factor. A bookkeeper can help you choose the appropriate accounting method between the cash method and the accrual method.
  • Bookkeepers can suggest the right type of bookkeeping software to get the tasks done quickly.
  • Accurate data entry is crucial for maintaining integrity. Your bookkeeper will be responsible for managing and recording financial transactions. These records help tax agents in Melbourne during tax season.
  • Efficient record-keeping depends on organising invoices and receipts effectively. Bookkeepers can help you organise receipts using different bookkeeping software.
  • It is important to record sales and revenue to assess financial performance. That’s why bookkeepers ensure to keep a record of each financial transaction.
  • Bookkeepers will be responsible for managing accounts receivables and accounts payable. Therefore, you don’t need to worry about your company’s cash flow.
  • With effective cash flow forecasting, a bookkeeper can help you make informed decisions for your company.
  • Bank reconciliation is crucial for ensuring accuracy. This process involves collecting documents, matching transactions, addressing and resolving discrepancies and reconciling balances.


Whether you are looking to assess your business finances or a company’s financial position, it is crucial to choose Reliable Bookkeeping Services for your company. We can help you organise your business books and accurate financial records, reconcile bank statements, and ensure accuracy in a business.