How to Create a Financial Report

How to Create a Financial Report. A financial report is a record of expenditures and receipts, recorded monthly on a special form. When you create a financial report, expenditures are itemized and total receipts are recorded every month. At the end of the fiscal year, an annual report is easy to create. A financial report helps business owners analyze profit and loss and is necessary to obtain financing.

Separate your monthly expenditures into categories. A category for utilities would include telephone, electric, water, sewer and garbage. A category for the storefront would include rent, lease or mortgage, taxes, maintenance and repairs. A vehicle expense category would include loans or leases, insurance, tolls, parking, gas and repairs. Labor expenditures will include wages, salaries and benefits. An insurance category will include property insurance, liability, health and workmen's compensation insurance. Materials, services and supplies necessary to operate your business, as well as office supplies, should be in a separate category.

Compare the types of financial reports available and choose one that will be the easiest for you to maintain on a monthly basis. If your operating system is Microsoft, then Microsoft Works or Microsoft Office will have a financial report form. Many business owners prefer Quicken or Excel to create a financial report, but it's a matter of personal preference.

Enter the monthly expenditures on the financial report form in the appropriate category. If there is an expenditure that has no category, there is room at the bottom of the form to add one.

Remember to add those expenditures you may pay annually. Create a category at the bottom of the financial report sheet for annual expenses. Place the annual amount paid in parenthesis after the name of the expense; then divide the annual expense by 12 to determine what the annual expense is on a monthly basis.

Total the monthly expenditures by adding them together; enter the total amount of your expenses in the appropriate category.

Add your monthly receipts and put the total in the appropriate space on the financial report. Most business owners prefer to separate cash sales from accounts that pay you on a monthly basis. Place the total amount of sales and income in the appropriate space.

Subtract the expenditures from the total amount of cash sales and monthly receipts to determine your monthly profit. At the end of your fiscal year, an annual financial report is now easy to create, based on the monthly financial report. This profit and loss statement will assist you in obtaining financing if needed.


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