Good record-keeping is good business.
Keeping good records for the cooperative allows managers to:
- Monitor profit and loss
- Prepare accurate financial statements
- Identify areas of growth and trouble areas
- Keep track deductible expenses
- Prepare tax returns
- Support items reported tax returns
- Monitor progress
- Increase the likelihood of the cooperative’s success
Attorney Carolyn Eselgroth of Barrett, Easterday, Cunningham & Eselgroth, LLP., emphasizes the importance of keeping good records.
Managers need good records to prepare accurate financial statements including income (profit and loss) statements and balance sheets. These statements can help in dealing with the co-op’s your bank or creditors and help the co-op manage business decisions.
- An income statement shows the income and expenses of the cooperative during a period of time.
- A balance sheet shows the assets, liabilities, and members’ equity in the cooperative at a given date.
Learn to read a balance sheet with CoBank Senior Relationship Manager Gary Weidenborner.