WHAT IS DRE? AND HOW DOES IT INFLUENCE YOUR SMALL BUSINESS?

The business world is fascinating, with the right idea and efforts you are able to transform R$100.00 into R$1,000.00 and R$1,000.00 into R$10,000.00, with time this becomeseasier and easier.

For this to become real, the entrepreneur will need to learn how some mechanisms work so that the business can flow more easily and clearly in a certain way, among these mechanisms we can mention:

Planning

Law Suit

Organization

finance

And a bunch of other things, but I want to talk specifically about a very important mechanism in the financial sector, known as the DRE or Income Statement for the Year.

This calculation shows the results of the company DRE is nothing more than a report that summarizes the operations carried out by the company. It compares the accounts of income, expenses, investments, costs and provisions calculated, showing the formation of the company's net income at the time.

For legal purposes, the DRE is made annually, but simplified monthly DRE for administrative purposes and quarterly DRE for the monitoring of fiscal expenditures can be made. The DRE Report must be prepared respecting the accrual basis, that is, according to the occurrence of the triggering event of the accounting record, regardless of the actual receipt of revenue or payment of the expense.

How important is DRE?

After understanding what DRE is and knowing an example of its structure, it's time to learn its importance in corporate accounting. The Statement of Income for the Year is intended to provide the user of the financial statements of companies with the basic and essential data on the formation of profit or loss for the year.

In other words, it is one of the most important reports that the accountant must generate. This is because it is used by managers, investors, banks and the government itself. It is through him that the capacity of your company and its real situation are evaluated. It is an essential decision-making tool.

What is DRE for?

The correct preparation of the DRE makes it possible to have an overview of the company's financial result. With this, it allows extracting extremely relevant information. Some examples are: the amount of the organization's general expenses, the composition of costs related to products and services, the total sales revenue, the profit obtained by the company with its operations, the incidence of taxes on the products, the level of indebtedness in what is found and what will be the strategies consequently adopted.

Thus, we can say that the Income Statement for the Year should not be used only for legal or tax purposes. DRE is also used for strategic business management and good corporate governance. With the DRE, it is possible to critically analyze the figures presented and determine the efficiency of the practices adopted by the company, thus enabling good financial management in the future.

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