A profit and loss statement and a balance sheet prepared from books that reconcile to the bank, ready to hand to a lender, a landlord or yourself.
Sooner or later, someone asks to see your numbers. The bank wants them for an equipment loan, a landlord before a commercial lease, a bonding company before your next job. The request usually arrives with a deadline and very little explanation.
For owners in Homestead, FL, financial statement preparation means two documents: a profit and loss statement showing what the business earned and spent over a period, and a balance sheet showing what it owns and owes on a given date. Both are prepared from reconciled books as part of our bookkeeping services for South Miami-Dade businesses, so every figure traces back to your bank and card statements.
The two documents stay the same. What changes is the period and what the reader wants to see.
An equipment loan, a line of credit or a loan program application usually calls for a recent profit and loss statement and a current balance sheet. Lenders look at whether profit covers the payment and how much the business already owes.
Before a commercial lease, a landlord may ask for proof that the business earns enough to cover rent. A clean profit and loss statement for the last full year, plus the current year so far, answers that directly.
Contractors bidding larger jobs often need a bond, and the bonding company wants to see the business's financial position first. Some set their own rules for who prepares the statements, so ask for the checklist early. Current books make the request easier to meet.
Not every set of statements is for someone else. A mid-year profit and loss statement shows whether the busy season paid off, and a balance sheet shows what's sitting in the business before you take money out.
A profit and loss statement is only as good as the books under it. If the accounts were never reconciled, a deposit counted twice inflates revenue and a missing card statement hides real costs. Anyone reading carefully will ask questions you can't answer.
Profit and loss statement preparation means checking what readers notice: owner draws kept out of expenses, loan payments split between interest and principal, equipment recorded as an asset instead of one month's cost. Balance sheet preparation means the cash, loan and card balances match statements dated the same day.
If your books aren't there yet, the gaps are filled through catch-up bookkeeping first. When the books are kept here through monthly bookkeeping, statements are ready soon after any month closes.
Every set gets the same finish, whatever the reason behind it.
That depends on who's asking, so start with their request. Many lenders want the most recent full year plus the current year to date. Share the request when you reach out, and the statements are prepared for exactly the period it names.
Yes, but the books come first. Statements prepared from unreconciled books carry the same errors as the books, and a lender who spots one will question the rest. Missing months are rebuilt and reconciled, then the statements are prepared from the finished numbers. If timing is tight, say so at the start.
They come from the same books and tell the same story, but they aren't always identical line for line. A tax return follows tax rules, so a few items, such as how equipment is written off, can differ. If a lender compares the two, you'll already know why they differ.
It's one of the best reasons. Statements at mid-year or after a busy season show whether you're making money, where it's going and how much is sitting in the business. That often leads straight into tax planning before the year ends, while there's still time to act on it.
Books reconciled every month, so a profit and loss statement and balance sheet are ready soon after each close.
Read about it Catch-Up & Cleanup BookkeepingMissing months rebuilt and reconciled in order, so the statements a lender asks for rest on finished books.
Read about it Quarterly BookkeepingFour reconciled closes a year, each with reports, for businesses with lighter activity that still need numbers on hand.
Read about it Return To BookkeepingEvery bookkeeping service we offer in Homestead, FL, on one page.
Back to BookkeepingTell us who's asking, what period they need and where your books stand. You'll hear what it takes to have statements ready by the date on the request.