Every business endeavor requires a tangible representation of its actual financial status. A company's financial statements importance is most seen when the business needs to attract potential investors.

Putting up your own business can be exhilarating: you become your own boss and, maybe for the first time in your life, you will be running your own show. Once you get your business off the ground, however, you find that as your business grows, you may find yourself inundated with the many challenges faced by small businesses.

Nothing worries a business owner more than overdue payments. Late payments can derail your very own cash flow. For small businesses, overdue payments can even put an end to their operations.

When preparing financial statements, it’s important to note that you are complying with the legal standard set for your business. In the US, a business’ financial reporting and analysis must be compliant to the Generally Accepted Accounting Principles (GAAP) guidelines to make sure they are following the ethical and accurate process.

Regardless of the size of your business, managing your overhead expenses is crucial to your business’ success. Finding ways to reduce overhead costs can be the best solution to improve your profitability, especially when business is slow.

Whether you’re a B2B or a B2C business, having a healthy cash flow is a crucial foundation for your business. As an entrepreneur, improving your small business cash flow should be one of your top priorities. However, there are many factors outside your control that could lead to cash flow problems.