Why Financial Reports Are Important for Your Business
Do you regularly go over your financial reports? Or do you assume that as long as the cheques clear and your in-house bookkeeper does not shout alarms, all is okay? Hopefully, the answer is yes to the first and no to the second question.
Regular financial reports are for more than ensuring that your doors stay open or for complying to government regulations. They provide an overview to your company’s performance, which in turn allows you to respond and plan better. GPS Accounting explains the benefits of proper financial reporting and their analyses.
How financial reporting helps improve business
Balance sheets, income statements, cash flow statements, receivables/payables aging reports – these are among the reports that you and your finance team should review regularly to understand your company’s financial and, therefore, overall health. Each report presents a different view so that you can identify strengths and weaknesses across your operations.
Of course, you want to see your business thriving and profitable, but you also want to know if there is trouble now or in the future. Balance sheets allow you to compare your assets to your liabilities, alerting you to potential problems. You may have more assets than liabilities, but what are the implications if most of your liabilities are US dollar loans while your business receives payments in Thai baht? Cash flow statements can give you a better idea of where your money is coming from. And where it is going. You may be able to save money or realign your budget because of consistently robust investment or financing inflows.
And if your reports present historical figures such as year to year or month to month, you can chart your business’ trajectory and alter your strategies as needed. Beyond the overviews from balance sheets and income statements, finance experts, such as at GPS Accounting, can prepare reports on specific departments or projects. These provide a granularity that lets you focus on targeted areas that need improvement or, if they are successful that you can model other operations after.
Healthy financial reports key for attracting investors
Using financial reports to ensure business success has added value for compliance and investing. If your accounts and books are maintained properly, then they should demonstrate your value to the outside world.
Regular reporting will help you identify and correct errors and discrepancies, so when it comes time to submit reports and financial filings to government authorities for tax or audit purposes, your company has no problems. Expertly produced and analysed financial reports may even reveal potential tax savings for an even greater benefit.
In addition to ideal compliance, investors are more attracted to companies that present clear, robust financial reports that demonstrate their financial viability and potential future profits. Even if the numbers may not be the best, providing high-quality financial reports can help create a sense of trust and transparency that can bolster your relationships and chances with investors.
GPS Accounting is expert at financial reports
Interested in learning more about how to make the most out of your financial reports? Need experts to help you compile and produce these reports as well as talk you through the results? GPS Accounting has the experience and the skills to make sure you are overseeing, managing, and benefiting from the right set of financial reports to improve your business operations and results. Contact us today for a free initial consultation.
