The financial statements needed by producers involved in direct marketing will vary depending on the size and the complexity of the operation. All direct marketers should have at least an annual operating statement and a balance sheet. Larger businesses may need to generate these statements more frequently and some may need other financial statements, such as a cash flow statement and a source and use statement. Direct marketers may prepare financial statements themselves or they may have them prepared by a commercial accounting firm. Good records provide information for financial statements, tax returns, employee records, and creditors.
Good records are essential to a direct marketing operation just as they are for any business.
Records provide information for the development of financial statements so the direct marketer can analyze the strength of the business operation. A record keeping system should be simple to use, easy to understand, reliable, accurate, consistent, and timely. When choosing a recording keeping system, the Small Business Administration recommends making sure that it is simple to use, easy to understand, reliable, accurate, consistent, and is able to provide information on a timely basis. Although collecting receipts in a shoe box may meet the first criteria, it leaves a lot to be desired where the remaining criteria are concerned. There are a host of alternative record keeping systems from which to choose.