“Must-have” financial documents for your business

QUESTION: As a small business owner I need to have a better understanding of my financial statements, especially my cash position at any given time. What do you consider the most important documents?

ANSWER: With all the responsibilities of ownership, running a small business can consume an inordinate amount of time. Making time to manage your financials can be hard, but there are three documents you cannot afford to ignore.

• Balance Sheet – This document is a snapshot of your financial position and shows you if you are in the red or black. It lists your business assets, liabilities and equity. Together, they represent the net worth of your business.

• Profit and Loss Statement –

Your P&L is your income statement. It summarizes your business revenues and expenses during a given period of time and enables you to understand how your revenues and costs impact

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your profitability.

• Cash Flow Statement – Of the three documents, the Cash Flow Statement is the most useful. You have payroll and other expenses that are due each month. Adequate monthly cash flow is critical if bills are to be paid in a timely manner. Developing a monthly cash flow budget will enable you to determine when these expenses come due.

by these three documents you have no idea where you stand financially and have no basis to work from in making strategic decisions for the growth of your business.

BY GRAY POEHLER Guest Columnist

In summary, your balance sheet and cash flow statement will tell you how much cash you have on hand, how much you owe and the equity you have in the business. Your annual profit and loss statement will indicate if you made a profit or not.

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When you put in the time to assemble and analyze these documents, you are giving yourself the tools to keep your small business on track. Set aside some time each month to review each. This will enable you to create financial goals for the coming months and years.

SCORE provides free templates for these three documents as well as a business plan for both startups and ongoing businesses. They can be accessed at tinyurl.com/2b38dum6.

Gray Poehler is a volunteer with SCORE Naples. Business counseling on this and other business matters is available, without charge, from the Naples Chapter of SCORE. Call (239) 430-0081 or visit naples.score. org/mentors .

Charlotte County’s efforts to help families and businesses rebuild after Hurricane Ian earned them the Pivot and Persist award from the FEDC. Through collaborations with entities across the state, including CareerSource Southwest Florida, the Small Business Administration, Charlotte County Emergency Management, and the United Way of Charlotte County, the Charlotte County EDO navigated crises and persistently supported their community.

Beth Cicchetti, executive director of FEDC, lauded Charlotte County’s efforts.

“The overall team spirit within the entire county to help families and businesses get back in business is an example to all of us in the state of Florida of how a community pulls together in the face of adversity.”

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