The Chart of accounts form the profit & Loss report, which is your income less all of your expenses (this is your profit) and the balance sheet report, which is the assets you have and liabilities you owe and how much your business is worth to you, the Equity.
Your bookkeeping system can produce these reports for you and it’s really important that you check your profit and loss report regularly as this will show you how your business is going. Are you making money? Are you spending too much on certain products? Are you buying too many assets that aren’t really earning you any money?
The financial side of your business is vital for your success. It helps you to set your prices, working out what products or services are working for you, where your money is going, how much to put away for income tax and GST.
Profit & Loss and Balance Sheet Reports
