Engineers use drawings to communicate design. Project managers use scope-of-work documents to communicate requirements. Accountants use financial statements to communicate a business’ financial status. If business managers do not read, or cannot understand, these statements then they are not receiving the information properly. Most of these statements are not extremely complicated and business managers should learn to use and understand them. Otherwise they are working from a position of disadvantage.
Balance sheets are one of the primary financial statements used. Schroeder (2004) said “[t]he Balance Sheet is usually done quarterly. This report is a snapshot of the financial status of your business” (p. 24). The balance sheet provides a single frame view of the current situation. Then over time each frame can work together to provide a high level movie of the company’s financials.
Schroeder, C. L. (2004, November). Basic bookkeeping. Gifts & Decorative Accessories, 105(11), 22-24.
