What type of financial statements should I keep?

In Washington, small business owners should keep up-to-date and accurate financial statements. This includes a balance sheet, which outlines assets, liabilities, and owners’ equity. It also includes an income statement, which summarizes a company’s income and expenses. Additionally, a cash flow statement is needed to understand how money is moving in and out of the business. Lastly, you will need to keep a statement of retained earnings, which shows how much of the profits are reinvested in the business and how much is given to the owners. Good financial records are essential for a small business owner to understand how their business is performing. This can help make important business decisions and ensure that expenses are properly tracked. It also provides an overview of data that can help inform decisions about investments, loans, and other financial matters. Keeping proper financial statements is necessary when applying for loans or grants from financial institutions, as lenders will want to see an up-to-date snapshot of your business’s performance. It is important to keep up-to-date financial statements to ensure accuracy and prevent any potential issues with the IRS. Good recordkeeping also helps to build trust with customers and vendors. Additionally, it is important to back up all files in the event of a natural disaster or system crash. It is also important to note that different accounting methods may be used by different businesses, so be sure to consult an accountant to ensure accuracy.

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What type of financial statements should I keep?

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