Replacing Worksheets in Your Business with Computerized Reports
If you use a computerized accounting system for your business, you don’t have to manually create a financial statement worksheet. Instead, the computer system gives you the option of generating many different types of reports to help you develop your income statement and balance sheet.
One of the advantages of a computerized system’s reports is that you can easily look at your numbers in many different ways. For example, the following figure shows the Company & Financial Report Navigator from QuickBooks.
The Company & Financial Report Navigator page in QuickBooks gives you access to many key financial reports.
Notice that you can generate so many different reports that the entire list doesn’t even fit on one computer screen! To get the report you want, all you need to do is click on the report title.
You can generate a number of different reports within the following categories:
Profit & Loss (income statement): Some key reports in this section include:
A standard report that shows how much the company made or lost during a specific period of time
A detail report that includes all the year-to-date transactions
A report that compares year-to-date figures with the previous year (provided you kept the accounts using the computerized system in the previous year)
Income & Expenses: Some key reports in this section include:
Balance Sheet & Net Worth: Some key reports in this section include:
A standard balance sheet showing a summary of assets, liabilities, and equity
A detail report of assets, liabilities, and equity
A report that compares the assets, liabilities, and equity levels with those of the previous year
Cash Flow: Some key reports in this section include:
Computerized accounting systems provide you with the tools to manipulate your company’s numbers in whatever way you find useful for analyzing your company’s results. And if a report isn’t quite right for your needs, you can customize it.
For example, if you want to see the profit and loss results for a particular week during an accounting period, you can set the dates for only that week and generate the report. You can also produce a report looking at data for just one day, one month, one quarter, or a combination of dates.
You can also take the time to custom design reports that meet your company’s unique financial information needs. Many companies customize reports to collect information by department or division. You’re only limited by your imagination!
As you work with your computerized system, you’ll be asked for information not easily found using standardized reports. The first few times you pull that information together, you may need to do so manually. As you get used to your computerized accounting system and its report functions, you’ll be able to design customized reports that pull together just the information you need.
Accounting Glossary
accounting equation
The equation Assets = Liabilities + Equity, which demonstrates the two-sided nature of accounting and is useful for explaining the concept of double-entry accounting (or double-entry bookkeeping).
Accounting Glossary
accounting period
The time period for which financial information is being tracked in a business, such as monthly, quarterly, or annually.
Accounting Glossary
accounts receivable
An account that records the amounts that customers owe to a business.
Accounting Glossary
adjusting entry
A correction made to a bookkeeping account that adjusts for accounting errors or other necessary changes at the end of the accounting period.
Accounting Glossary
cash flows
Used to describe the source or sources of cash or how cash is used.
Accounting Glossary
Chart of Accounts
A list of all the accounts used by a business, including what types of transactions go into each account.
Accounting Glossary
debit
An accounting entry that increases an asset or expense account, and decreases a liability or income account.
Accounting Glossary
dividends
A portion of a company’s profits paid by share of common stock on a quarterly or annual basis.
Accounting Glossary
FASB
Financial Accounting Standards Board. FASB is the highest-ranking authority in the private (non-government) sector of the U.S. for making pronouncements on GAAP and for keeping accounting standards up-to-date.
Accounting Glossary
Federal Unemployment Tax
In the U.S., the fund that used to be known simply as Unemployment. Employers contribute to the fund, and states also collect taxes to fill their unemployment fund reserves. (The acronym FUTA means Federal Unemployment Tax Act.)
Accounting Glossary
fidelity bonds
A type of insurance — typically carried by employers for their employees — that helps guard against theft and reduce the risk of loss.
Accounting Glossary
FIFO
First-in, first-out. A method for costs of goods sold in which a business charges out product costs to cost of goods sold expense in the chronological order in which the goods were acquired.
Accounting Glossary
fungible
Describes a product that is interchangeable and virtually indistinguishable from another product.
Accounting Glossary
General Ledger
A summary of all of a business’s accounts and transactions.
Accounting Glossary
IASB
International Accounting Standards Board. The IASB (based in London) is the main authoritative accounting standards setter outside the U.S.
Accounting Glossary
Journals
The location in which bookkeepers keep records (in chronological order) of daily company transactions.
Accounting Glossary
LIFO
Last-in, first-out. A method for costs of goods sold that selects the last item you purchased first, and then works backward until you have the total cost for the total number of units sold during the period.
Accounting Glossary
LLP
Limited liability partnership. A legal structure that state laws offer to qualified professionals in which all the partners have limited liability.
Accounting Glossary
PC
Professional corporation. A legal structure that state laws offer to qualified professionals who otherwise would have to operate as an unlimited partnership liability.
Accounting Glossary
petty cash
A cash account that businesses keep on hand for unexpected expenses.
Accounting Glossary
revenue
Monies that are collected in the process of selling a company’s goods and services.
Accounting Glossary
salvage value
The amount that an asset is worth after it has been fully depreciated.
Accounting Glossary
statement of cash flows
A financial statement that summarizes a business’s cash inflows and outflows during an accounting period.
Accounting Glossary
transactions
Economic exchanges between a business or other entity and the parties with which the entity interacts and makes deals.
Accounting Glossary
worker’s compensation insurance
A type of insurance carried by employers that covers its employees in case they are injured on the job.
