Entrepreneurs or those who aspire to own their own business can easily become overwhelmed when applying for loans.
Before taking the plunge, business owners should be aware of certain terms and aspects associated with the loan process, and take steps to make the loan application procedure go more smoothly.
Conducting an internal accounts receivable and accounts payable audit allows businesses to organize customers that owe them money and the vendors they owe, respectively. Having this information at hand facilitates the aging of accounts payable and accounts receivable, which presents this information by due date or invoice date. AR and AP audits can also help identify instances of duplicate payments and financial mismanagement.
Services such as Technology Insight's DataShark AP can help businesses monitor how they work with vendors, ultimately allowing them to create a more effective accounts payable function.
Other important financial documents include balance sheets that show assets, liabilities and net worth from the last three fiscal year-ends, personal financial statements of owners, partners, officers, and stockholders, and income statements that offer insight into business profits and losses.