CCH Online Store Books on small business topics. Free E-mail Newsletter Monthly updates on developments affecting small businesses. Before we launch into a discussion of the nuances of financial statements, you need to accept the fact that there are rules to putting these statements together. How much you need to worry about the rules, however, depends on what you want to do with the statements. If you are intending to show them to third parties such as lenders, creditors, or investors, you need to be more careful than if they are intended for your eyes only.
Finance is just as much a sport as football.
GAAP includes numerous guidelines and conventions that help insure that reported financial information is accurate, objective, and reasonably consistent for all types of business, so that results from one business can be compared to those from another. Most likely, your financial statements will be prepared by your accountant, who will follow the GAAP rules when creating them. What's more, CPAs must adhere to certain professional ethics requirements or risk losing their licenses. Even if you're not required to use a CPA by your bank, you may decide to have a CPA prepare your statements, particularly if you're planning to seek financing or investors in the near future. However, you can also opt to have a non-CPA accountant prepare your statements, or even to prepare your own financial statements.