{"id":116,"date":"2019-08-22T18:10:49","date_gmt":"2019-08-22T18:10:49","guid":{"rendered":"https:\/\/www.leskunaccounting.com\/blog\/?p=116"},"modified":"2022-11-04T17:34:01","modified_gmt":"2022-11-04T17:34:01","slug":"prepare-financial-statements","status":"publish","type":"post","link":"https:\/\/www.leskunaccounting.com\/blog\/prepare-financial-statements\/","title":{"rendered":"How to Prepare Financial Statements"},"content":{"rendered":"<p>As a business owner, it is important to prepare financial statements to help make budget decisions and plan for your business\u2019 future. At <a href=\"https:\/\/www.leskunaccounting.com\/\">Leskun &amp; Son Accounting<\/a>, we provide <a href=\"https:\/\/www.leskunaccounting.com\/bookkeeping.php\">bookkeeping<\/a> services to businesses throughout Abbotsford, Langley, and Mission that help to ensure that our clients are able to comprehensively <strong>prepare financial statements<\/strong>.<\/p>\n<p><a href=\"https:\/\/www.leskunaccounting.com\/blog\/financial-accounting-services-abbotsford\/\">We make financial accounting easy. Find out how!<\/a><\/p>\n<h2>What is Included in Financial Statements?<\/h2>\n<p>Financial statements are comprised of the following four elements:<\/p>\n<ul>\n<li>An income statement<\/li>\n<li>A statement of changes in shareholder equity<\/li>\n<li>A balance sheet<\/li>\n<li>A cash flow statement<\/li>\n<\/ul>\n<p>These separate statements can be prepared most easily by using spreadsheets or accounting software and each one offers a look into how a business has spent money to predict future cash flows and financial necessities.<\/p>\n<p><a href=\"https:\/\/www.leskunaccounting.com\/blog\/bookkeeping-tips-for-small-chilliwack-businesses\/\">Learn some handy bookkeeping tips for small businesses.<\/a><\/p>\n<h2>How to Prepare Financial Statements<\/h2>\n<p>By following the proper steps and tips, preparing financial statements can be simplified greatly. The steps to compile financial statements are as follows:<\/p>\n<h3>1.\u00a0\u00a0\u00a0\u00a0 Get Your Records Organized<\/h3>\n<p>Before beginning any actual paperwork, get all of your financial records organized by month and type of document. These records will include expense receipts, bank statements, and credit card statements.<\/p>\n<h3>2.\u00a0\u00a0\u00a0\u00a0 Prepare Your Income Statement<\/h3>\n<p>An income statement will report your company\u2019s revenues and expenses. To prepare this financial statement, you will need to tally up the expenses of the business and subtract them from the total income of your operation. Expenses can include the costs of goods, administrative costs, and expenses related to customer outreach.<\/p>\n<h3>3.\u00a0\u00a0\u00a0\u00a0 Prepare a Statement of Changes in Shareholder Equity<\/h3>\n<p>The statement of changes in shareholder equity shows changes in a company\u2019s ownership. If one owner or shareholder buys out another for a larger stake in a company, this report will reflect that action. This financial statement not only shows who finances a company but also whether the company is financed by capital, earnings, or debt.<\/p>\n<h3>4.\u00a0\u00a0\u00a0\u00a0 Prepare a Balance Sheet<\/h3>\n<p>Balance sheets state what a company\u2019s assets are and who owns those assets. In order to prepare this financial statement, it is necessary to know which assets are financed through debt and which assets are owned. The balance sheet will state the dollar amount of assets owned by the company and specify how much of that amount is owned through liability and how much is the owner\u2019s equity. This financial statement will change based on the payment of debts and acquisition of assets, meaning that it is only accurate to the date that it was created.<\/p>\n<h3>5.\u00a0\u00a0\u00a0\u00a0 Prepare a Cash Flow Statement<\/h3>\n<p>Cash flow statements report any money that goes in or out of a company. They differentiate between cash inflow from sales or revenue and money that came from a loan. This type of financial statement also offers insight into the types and timing of expenditures, which is useful for predicting future business expenditure.<\/p>\n<p><a href=\"https:\/\/www.leskunaccounting.com\/blog\/bookkeeping-services-small-businesses-langley\/\">Need help with your business bookkeeping?<\/a><\/p>\n<p>If you would like to learn more about how to prepare financial statements or if you are interested in one of our services, please <a href=\"https:\/\/www.leskunaccounting.com\/contact\/\">contact Leskun &amp; Son Accounting<\/a> at 1-877-826-1219 or fill out a contact form on our website.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As a business owner, it is important to prepare financial statements to help make budget decisions and plan for your business\u2019 future. At Leskun &amp; Son Accounting, we provide bookkeeping&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,14,16],"tags":[],"class_list":["post-116","post","type-post","status-publish","format-standard","hentry","category-bookkeeping-services","category-financial-records","category-tax-tips"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to Prepare Financial Statements<\/title>\n<meta name=\"description\" content=\"At Leskun &amp; Son Accounting, our services ensure that our clients are able to comprehensively prepare financial statements. 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