When starting your business, one of the most important documents to keep are financial statements. These are statements that documents all operational costs within the business, its financial standing and cash flow at any given moment.
There are three main statements every SME needs to keep record of to efficiently run your business: income statement, balance sheet and cash flow statement. This is sound financial practice.
Every business owner needs a clear and accurate representation of their financials. Apart from SARS, a time when this document is most needed and seen is when you need to attract partners and investors. It will outline the risks and opportunities that they will want to see.
It can also be used when applying for a business loan. In doing so, the bank will be able to check affordability and compare it against the growth of the business.
Keeping your financial statements updated means that you have record of all transactions and money movement so you never have to worry about any nasty surprises creeping up on you.