These reports are commonly required by your accounting professional or needed by yourself for business planning or to properly file your year-end taxes. It is good practice to run these reports on a monthly basis and save them to your computer so you can review them and track down any changes at the end of the year. All of these reports can be found in the navigation bar to the left under Reporting.
Income Statement or Profit and Loss (P&L) Report
This report measures the company's financial performance for the year by summarizing the sales revenue, the cost of goods sold, and expenses for both client-related and non-client-related activities. This report will also include year-to-date (YTD) totals.
Balance Sheet
This report is used to display the overall financial health or worth of the company by analyzing the assets of the company against the liabilities and equity. The report shows these accounts:
Assets: Areas of value within the company (cash, accounts receivable, works in process, equipment, etc)
Liabilities: Areas where or sources that withdraw value from the company (accounts payable, bills that you owe, sales tax that you've collected that you've not yet paid your sales tax authorities on, credit card debt, etc)
Equities: The accumulated capital employed of the company; it really represents the essential net worth of the company. Effectively you can think of it as the area where the owners or the ownership of the company has withdrawn assets so this would be considered the owners taking out worth of the company, either as stock, as owners draw, as income, or retained earnings
In accrual accounting (the model Design Manager utilizes), the balance sheet also displays information for a few very specialized accounts. These are often referred to as subsidiary accounts.
In Assets: Accounts receivable, Vendor deposits, Work in process
In Liabilities: Accounts payable, Client deposits
If those reports listed above, and in turn the accounts themselves, are monitored on a timely basis and the information on them is accurate, then you can be fairly confident that the balance sheet is accurate. If the balance sheet is accurate, you have a very good indication that your income statement and trial balance will be accurate as well.
Trial Balance
This report lists all the accounts and their current balance, and essentially it consolidates the information from the income statement and the balance sheet into a single report. The Asset accounts are shown in the 10s or 10,000s, the Liability accounts in the 20s or 20,000s, the Equity accounts in the 30s or 30,000s, the Revenue accounts in the 40s or 40,000s, the Cost of Goods Sold accounts in the 50s or 50,000s and the Expense accounts in the 60s or 60,000s.
Asset, COGS, and Expense accounts usually maintain debit balances, which is the first column and Revenue/sales, Liability, and Equity accounts generally have credit balances.
At the end of the report are your summated or net debits and net credits. These two numbers should always match because every transaction must debit one or more accounts for the same amount that it credits one or more accounts (net debits and credits for a particular transaction and your overall trial balance must always match).
Open Client Deposit Report
This report displays deposits on proposals and retainers that you've recorded from your client but you've not yet applied to a client invoice. This report also shows client invoice transactions that utilize deposits and retainers as well. The report is used as a physical representation of the activity that is currently held in the Client Deposit Liability Account. This is a Liability as the funds still belong to the Client, until they are utilized on a Client Invoice.
Open Vendor Deposit Report
Vendor deposits are the initial funds for the Vendor so they begin processing an order, and the Open Vendor Deposit report shows all these deposits on Project Purchase Orders in the platform that we have not yet applied to a Vendor invoice or final Vendor invoice for that Purchase Order. The report will show Vendor invoices that utilize a portion of the original Vendor deposit which leaves a balance of the deposit still available and it will remain there until the entire deposit is applied to a Vendor invoice. This report represents the activity on our Vendor deposit asset account.
Work in Process Report
When you receive and record an Invoice or bill from the Vendor, by default, Design Manager records the cost of these goods or services first into your work-in-process assets account, where it will remain until the Client is invoiced for the goods or services. This report will show these Vendor Invoices for which a Client has not been invoiced for the goods or services. At that point, the cost will be relieved from work in process and moved into cost of goods sold (COGS). Work in process is an asset account because your firm technically owns the goods until the client is invoiced. Work in process can be conceptually considered as the company's inventory that's been allocated or earmarked to a particular project: you've purchased it on behalf of the client and you're holding it until you invoice the client.
Aged Accounts Payable Report
This report shows the balance that you owe on bills that you've recorded from the Vendor, but you have not yet remitted payment. When you enter deposits (Vendor invoices, operating expenses, etc), they first go into the accounts payable liability account, provided that they were not applied to a credit card, and they'll remain there waiting for you to write a check or otherwise indicate a payment online, a wire transfer, etc. The accounts payable is a liability account, as the company is eventually going to be required to remit payment at some point to alleviate that debt.
Aged Accounts Receivable Report
After you've begun to invoice your Client for finalized goods and services, the balance of the Client Invoice remains in the accounts receivable asset account until the Client gives you your final payment. This report shows Client Invoices that have not been paid in full.
This is an asset because the company has a firm and reasonable expectation that payment from the Client will be received at some point, and you'd essentially convert that asset from accounts receivable into one of your cash or checking accounts.
Other Recommended Reports
Checking or banking statements
Sales tax report
Accounting inquiry report
When you review these reports, if you find problems transactions and need help understanding these or the reports you can reach out to support via support@designmanager.com