As soon as an idea to start a new business clicks, the first thing that should pop up within your mind is to how to keep records. Based on the nature of the business, elaborate the requirement of financials books to be prepared for maintaining a rigorous track of financial activities.
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Cash flow statement is a part of financial statements summarizing the position of Cash Inflows and Cash Outflows of a business. It reflects a clear picture of the sources and applications of cash and helps to understand the actual liquidity position of the company.
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Reserve means an appropriation of profits or other surpluses to strengthen the liquid resources of the business enterprise and not for meeting any liability, contingency or any commitment of the business.
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When you are self-employed, it is very important to manage your income and outgoings carefully. For example, if your customers do not pay you on time, it can be difficult for your business to make a profit. When customers buy goods or services from you but pay for them at a later point, this is known as getting ‘credit’ from you.
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