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You can generate QuickBooks financial statements under the reports section of your QuickBooks dashboard. Prepare an up-to-date profit and loss statement, balance sheet, and statement of cash flows. You can customize the time period, and drill down into detailed information, such as what portion of your profits came up from a specific customer.
The great thing about accounting software like QuickBooks is that detailed financial information about your business is always at your fingertips. One way to use QuickBooks is to generate financial statements for your business. Financial statements—such as a profit and loss statement, balance sheet, or statement of cash flows—are a window into the health of your business and help you spot problems and opportunities.
You can use QuickBooks financial statements when opening a business bank account, applying for a business credit card or loan, or when planning for the following year. If you can’t quite figure out how to make something work in QuickBooks, or what reports you should be looking at, read on. We’ll tell you what types of financial statements are available on QuickBooks, what they’ll tell you about your business, and the instructions you need to follow to access them.
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The beauty of QuickBooks is that you can create dozens of custom reports to help you better run your business. Beyond the basic three financial statements—profit and loss, balance sheet, and cash flow statement—you can also customize reports by product, vendor, employee, bank, or customer.
QuickBooks gives you flexibility as to how the statements are used and shared. You can view them in QuickBooks, email them to yourself or another member of the business, or export them for later viewing. QuickBooks even lets you schedule financial reporting, so you can automatically receive and share updated financial statements on a periodic basis.
Here are the three main types of QuickBooks financial statements you can create:
Your profit and loss statement, also called an income statement, summarizes your business’s financial performance over a period of time—daily, weekly, monthly, quarterly or annually. It is an important document because it tells you the company’s biggest areas of expenditures and revenues.
The profit and loss statement lets you take advantage of opportunities that increase sales and trim back on expenses. You’ll want to review this statement more than once a year, and definitely before filing your small business taxes. You can run a standard profit and loss statement in QuickBooks or a profit and loss detail which shows year-to-date transactions for each income and expense account.
Here’s how to prepare your QuickBooks profit and loss statement:
A balance sheet is a statement of the assets, liabilities, and equity of a business—essentially a “snapshot” of your business value at a specific point in time. Balance sheet items are calculated by subtracting your liabilities—what you owe—from your assets, cash, or property—what you’re own or is owed to you. The result is equity, or what your company is worth.
Balance sheets are useful for accountants to see your financial health and for banks when you are applying for loans. It’s also essential for the small business owner to get a true sense of how their business is doing.
Just as with a profit and loss, the standard balance sheet is fine, but I recommend pulling the balance sheet detail in QuickBooks to send to your tax preparer. As you can guess, this is a more detailed version of the standard balance sheet, showing the starting balances at the beginning of last month, transactions entered in for the month, and ending balances.
To create your QuickBooks balance sheet, follow these instructions:
Photo credit: QuickBooks
A cash flow statement, or statement of cash flows, shows the amount of cash that flows into your business from a variety of sources and flows out of your business in a given period of time. Statement of cash flows is important because it shows your company’s actual cash position to fund operating expenses and debt obligations. The liquidity of your company will be illustrated in a statement of cash flows.
Depending on your accounting method, you might record revenue at the time of a sale or when your customer actually pays. You can specify your accounting method in QuickBooks, making it easy to get a handle on your cash flow.
Here’s how to access your QuickBooks cash flow statement:
For most small businesses, the three basic financial statements are all you’ll need to get a good understanding of your business’s financial performance. However, these just scratch the surface of what’s possible with QuickBooks.
Here’s a summary of available QuickBooks financial statements:
Along with periodically running each of these reports, you can also get nice visual representations and graphs in QuickBooks of how your company is performing. These are useful for general financial analysis and for planning with your bookkeeper, tax preparer, or business consultant.
The most commonly used QuickBooks financial statements are the profit and loss, balance sheet, and cash flow statement. However, there are dozens of other reports you can run as well, depending on what information you need and for what purpose. New QuickBooks users might feel overwhelmed at the range of financial reports that are available. Just remember that the process always starts on the reports tab of the home dashboard. From there, generating QuickBooks financial reports is relatively intuitive. If you get stuck, you can always ask your bookkeeper or a QuickBooks ProAdvisor for help.