In order to survive, there are some accounting documents that must be available in your business.

The management of a small business requires the preparation of documents for the filing of business taxes; application for business loans; the internal tracking of revenues; expenses and profitability. There are four main accounting documents that are essential for the performance of the functions listed above:

1. Balance Sheet: A balance sheet is a financial statement. It reports the assets, liabilities and shareholding of a business at a specified point in time. Even more, it provides a snapshot of what the business owns and owes. Also, it portrays what its owners own in the business.

It is often supported by the Income Statement and Cash Flow Statement. Hence, the Balance Sheet is a core financial statement used in valuing the net worth of a business.

The goal of the bookkeeper (and the business) is to maintain a balanced balance sheet. Albeit, this is a condition in which everything the business owns (total assets) equals its liabilities plus the valuation of what the owners own in the business.

2. Income Statement:
The Income Statement is often called the profit and loss statement. Furthermore, it is a summary of the revenues and expenses of the business during the year. Also, it is used in calculating the net profit or loss of the business in a trading year.

The income statement is also critical to determining the break-even point of a start-up business, and the profitability of a business over a period.

3. Cash Flow Statement:
A business needs enough cash on hand to cover its expenses. Hence, failure to achieve and maintain this state of affairs can have a negative effect on the financial health of a business.

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