Running accounting reports can be a stressful activity for most businesses and freelancers. If you are a landscaper struggling to evaluate your past year’s financial performance, you are not alone. It is not uncommon for the landscapers to feel intimidated by pulling financial information for the landscaping business.
While it may feel like an arduous task, it becomes easier as you familiarize yourself with the types of accounting reports and what purpose each of the reports serves. Once you know how to pull accounting reports for your landscaping business, you will be deriving valuable insight into your financial standing.
What is an Accounting Report?
An accounting report is a financial statement you file to show your company's past and current financial performance. You can analyze the annual accounting reports to make financial forecasts for the upcoming year.
Your account reports may include other information for each department of your landscaping business, such as an analysis of financial information to determine cash flow usage by each department. You can run the analysis of the financial reports on a monthly, quarterly, and yearly basis.
5 Accounting Reports for Landscapers
If you are considering pulling accounting reports as a landscaper and wondering which ones are the most important, here are 5 must-know reports to review your financials for the last 12 months.
#1 – - Cash Flow Statement
A cash flow statement refers to details about money coming in and its sources and money going out as expenditure. This will enable you to see how well your landscaping business generates cash.
If you are an executive or a decision-maker, you can use cash flow reports to identify where the cash is coming from and where it is going. You can even use these accounting reports to measure your business cash flow between 2 specific dates. For instance, you can check the cash flow within the last 3 months or from January 1 to July 31.
In order to prepare a cash flow statement, your accountant will look at the cash flow in all accounts, including liability accounts, expenses accounts, equity accounts, asset accounts, and revenue accounts.
#2 - Income Reports
Do you really wish to dig deeper into your income as a landscaper and understand how it relates to your business's profitability? Then running a departmentalized income report is what you need. This is mostly a report that landscaping businesses will benefit from. You can evaluate the financial performance of your landscaping business by assessing data from each department.
Furthermore, you can even identify domains within your landscaping business that may need a little bit of tweaking.
#3 - Payroll Report
A Payroll report will enable you to keep track of the payroll history and details that are vital to make well-informed financial decisions. There are various subtypes of payroll reports that you must know about, such as:
- Payroll Tax Liability
- Payroll Wages and Tax Summary
- Sick leave and Vacations
- Total Payroll Cost
- Worker’s compensation
A payroll report gives you detailed information about the hours worked, wages, taxes, and compensations paid. This report will also help you file your taxes every month and tax returns at the end of each year.
#4 – Profit and Loss Reports
Of course, every business is about making profits as it is a gauge of how successful your landscaping business is. Therefore, you need to have a clear understanding of your profits and losses incurred in a year or over a specific period of time.
Learning to read the profit and loss report will help you determine whether your business is going in the right direction. Knowing the leakages and reasons for losses in your accounting reports can help you eliminate those factors and turn your business revenues around for good.
However, do not mix a profit and loss accounting report with your balance sheet. A balance sheet is just an overall snapshot of your business accounts, whereas a profit and loss report provides itemized detail about each transaction.
Your profit and loss report will help you look at:
- How much have you earned?
- How much did you spend to run the landscaping business?
- How much money did you make on top, also known as profit (If any)?
Every profit and loss report has 5 key components that you must look into when reviewing the statement.
- Administrative and general expenses this is a part of your overhead costs
- Direct costs related to your business
- Indirect expenses which is also a part of your overhead cost
- Revenue generate/sales
- Net profit
#5 - Tax Filing Accounting Reports
Whether you are a landscaping company or a freelancing/self-employed landscaper, you need to learn how to read your year-end tax filing accounting reports. These are commonly known as your W2s and 1099s.
As an employer, it is one of your responsibilities to provide these reports to your subcontractors and direct employees. The tax-filing reports contain vital and detailed information about each employee’s income for the last year.
For a landscaper employee, the tax filing accounting report is a W2, whereas, for a contracted worker, you provide 1099. Both these reports become due by the end of the month of January every year. However, you have to remember that you do not just share the aforementioned reports with the employees alone.
You must file a copy of W2s and 1099s with Social Security Administration (SSA) and Inland Revenue Service (IRS). The last date for this submission is the same, i.e., by the end of January for each year. For example, you wish to file the tax reports for 2021, the last date to provide the report to the employees as well as IRS and SSA is January 31, 2022.
Benefits of Accounting Reports
Here are 6 key benefits of reviewing the accounting reports.
- You can run a real-time analysis of your landscaping business financials at any time
- You can optimize your expenses and costs.
- Staying financially compliant with authorities’ regulations
- Optimizing your landscaping business’s financial performance
- Reducing risk exposure
- Optimize your sales and marketing strategy
While you may be the best landscaper or landscaping business in town, learning to read your accounting reports will enable you to gain better control of your finances.
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