Income Statement Basics -

Posted by CateCosta under Finance
From http://www.catecosta.com 3118 days ago
Made Hot by: justretweet on October 16, 2015 4:54 am

A brief overview of the income statement to help entrepreneurs understand their business finances.

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Comments

Written by HeatherStone
3118 days ago

Very informative video, Cate! Though it's important to understand the basics of these financial statements, I'm guessing you'd agree day to day bookkeeping or accounting is one of the first things a small business should outsource. Or is it? In the early days when money is tight, is it realistic to hire a financial manager? How do you decide when the books are too much for you to handle? And how do you find the money to get the experienced financial help you need in the scrappy early days of your startup?

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Written by CateCosta
3117 days ago

Hi Heather:

Yes, in fact, in the full version of the post I specifically say this info will get you to the point of being able to understand what your accountant is saying to you, it's not going to get you to the point where you can skip having an accountant. I'm a believer in getting help as soon as you can.

For most entrepreneurs, meeting with an accountant to discuss a strategy for the year and then going back to that accountant come tax time (which is 4 times/year, not once/year for most entrepreneurs) is the minimum you should do to make sure you're not making any major mistakes. Often, the savings the accountant can find for you on your taxes will pay for his/her fee anyway.

In terms of how to decide when the books are too much for you to handle - if you're watching my video about the basics of the income statement, the books are too much for you to handle. Even if you think you can't afford to hire an accountant on your own, try hooking up with your local SBDC, WBDC, or other entrepreneurship support organization. They typically have partnerships that allow their clients to access free or heavily discounted professionals like accountants and lawyers.

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