Managing a company is not an easy task and requires good organization, especially in relation to finances. In this sense, the Income Statement (DRE) is essential for your business.
Some managers even avoid this moment as much as possible, but the time comes when it is necessary to prepare the DRE. The truth is that this document is very simple and extremely necessary to assess the company’s financial health .
If you don’t know what the DRE is, are just starting a business or want to know more about this document, continue reading this article, where we will cover the most important points.
What is DRE?
DRE is the acronym for Income Statement, it is an accounting and management report used to show all of a company’s financial operations during a given period.
This report must be completed at least once a year, as it is mandatory for all companies, except MEI (Individual Microentrepreneur), and is done after the job function email list end of the calendar year (which includes the months between January and December) and must detail the result of this period, that is, the net result of the year (revenue minus expenses).
However, there is nothing stopping managers from making calculations on a monthly or quarterly basis. Many even adopt this practice to monitor the company’s performance and set more assertive goals.
What is the Income Statement for?
More than just a simple accounting report, the cost-effectiveness considerations DRE shows, in a more simplified way, whether your business is making a profit or a loss. This occurs by cross-referencing data between the company’s revenues and expenses . With this, the manager can adjust the budget and make more accurate decisions.
Many entrepreneurs do not understand the importance b2b reviews of the DRE and, in many cases, do not give importance to this document (which is usually prepared by the accounting department). This way, the manager will not be aware of the company’s real situation, which can, in the future, cause serious problems.
We have listed some advantages of the DRE for managing a company.
Evaluate business management
As we said, the DRE is a report rich in strategic information , which, when well prepared, prevents managers from being surprised by higher-than-expected expenses or a drop in revenue.
The DRE helps to have precise control of the company’s income and expenses, providing data that assists in the analysis of the strategic and financial management of the enterprise.
Optimize processes
In the same way that the DRE provides data that helps in the economic management of the company, it also serves as a consultation to identify possible failures .
This allows decision-makers to be more assertive in correcting these flaws, optimizing processes and, in this way, reducing operating costs, helping the financial health of the business.
