Owning a business requires an understanding of many different types of issues. Among the most important of these issues is financial management. A sound financial management system will help you understand why your business is flourishing or why it is vulnerable in some areas. It will enable you to realize trends within your business so that you can manage proactively instead of reactively.

Further, being able to produce a complete record of financial documents can enhance the value of the business should you decide to sell it at some point in the future. Finally, understanding your financial records will increase the possibility of acquiring funding from banks and other financing sources.

There are three main components of a complete financial system: cash flow statement, balance sheet, and income statement. It is very difficult to fully understand or manage a business without preparation and analysis of all three statements.

For additional information or assistance, please email us at cedsbsd@ky.gov or call 800-626-2250.

Additional Resources:

U.S. Small Business Administration cash flow statement (Excel worksheet)
http://www.sba.gov/idc/groups/public/documents/
sba_homepage/form_finasst_cshflstmt.xlt

U.S. Small Business Administration balance sheet (Excel worksheet)
http://www.sba.gov/idc/groups/public/documents/
sba_homepage/sba_010150.xlt

U.S. Small Business Administration income statement (Excel worksheet)
http://www.sba.gov/idc/groups/public/documents/
sba_homepage/form_finasst_incomestmt.xlt