I Love Bookkeeping

There are a lot of poor practices when it comes to presenting financial statements. When you present financial statements to your clients, you should always present three documents: the balance sheet, the income statement, and the statement of cash flows. [2:35] All three are crucial. If you are only presenting the balance sheet and the income statement, you are leaving out a critical element. Analyzing the cash flow is the lifeblood of the business. If you’re not currently presenting the statement of cash flows, your first step is to learn how to create it and start presenting it to your clients. [3:55] The second thing is to present the statements using the accrual basis even if the business uses the cash basis for tax. Timing is the difference in the accrual basis because it gives you an accurate picture of the financial health of the business that can’t be manipulated. [5:40] One challenge that bookkeepers encounter is when Quickbooks presents the balance sheet one way, they assume that’s the right way. I