Martin LeFevre - What You Need to Know about Business Financial Statements

Martin LeFevre is an accounting professional with over ten years of experience. He has prepared and audited multiple statements for business and individuals during his career.

There are three primary business financial statements.

The income statement shows the revenues from sales and other income. The statement of cash flows indicates cash inflows and outflows during a certain period. The balance sheet is a statement of financial condition that shows assets and sources of assets for a business at the end of a certain period.

To understand any of these statements for a business, you need to have an understanding of how the business functions. You first need to know whether the business sells products or services. For example, financial statements for a dry cleaning service are going to be different from the ones from a bank.

The form of a financial statement usually follows the function of the business and the way the business makes a profit.

Dollar amounts in financial statements are usually rounded off. They either do not present the last three digits or the last six digits. Many smaller companies choose to include amounts out to the last dollar or even the last penny. The more digits there are in a dollar amount, the harder it is to comprehend the amount. Financial statements are formal documents. They do not use professional slang or street language. They also rarely include any graphics or artwork in the statements themselves, even though many big public companies include a lot of visual information in their financial reports. This is done by graphic designers and experts once accounting professionals like Martin LeFevre finish preparing the actual reports.

Martin LeFevre - A Brief Overview of the Responsibilities of Accounting Departments

Martin LeFevre is a gifted accountant who has worked at a number of accounting firms during his career.
Accounting extends into many areas of life for both individuals and organizations. You may not realize that when you make entries in a checkbook or go over your online bank statements, you are doing accounting. When you get a personal loan or a mortgage on your home, you are dealing with methods that lenders use to calculate interest rates and fees, which is also accounting.

Accountants that work for organizations do not just prepare financial reports and statements. They also create internal control systems for the bookkeeping processes. The goal of such systems is to decrease the number of errors in the records of the organization’s activities. Internal control systems also detect theft, embezzlement, fraud, and other potential issues and problems.

 
Most people do not realize how important an accounting department is for any organization. Everyone understands that a business can’t exist without sales, but the necessity of accounting is often not obvious. Accountants create and control many of the back-end systems in an organization.
Here are some of the responsibilities of a typical accounting department:

Payroll. Accountants calculate or monitor systems that calculate total wages and salaries for all employees during all pay periods.

Cash processing. Accountants identify and record all cash from all business activities, including sales and other sources. They also make sure that cash is deposited into proper accounts and that sales people have enough cash to give change to customers.

Inventory. Accountants usually keep track of all purchase orders and inventory for an organization. They also track other products and services that the organization buys, from paper clips to warehouse trucks.

Many accountants, including Martin LeFevre, perform other functions as well.
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