Financial Statements
Preparation of Financial Statements, may not be necessary, you need to read your trust deed or company constitution to establish exactly what is required, but having financial statements prepared on a regular basis, makes it easier to prepare a tax return not mention, reviewing your business’ performance and assisting with finance application.
You not only need to prepare a Profit and Loss, but we need to produce a Balance sheet, this shows you the Assets and Liabilities of your business and can help to highlight areas of concern.
I have come across a number of scenarios where proper financial records were not kept/prepared (they were just doing a tax return) and then when the client needs to apply for finance they have nothing to show and that can make it very difficult for the financial institution to approve your application without them. We then have to embark on the pain staking and somewhat expensive process of preparing financial statements for the last few years.
Financial statements don’t need to be a complicated process. The progress of Accounting Software such as MYOB, Xero and QBO have certainly gone a long way to taking some of the time and pressure out of compliance work, but just remember that the information produced is only as good as the data that is input. So take the time to set up the files correctly and ensure that things are being entered right and you will go a long way to preparing the financial statements and reducing down your compliance costs.
The more of this work that you can do yourself then the less time is necessary for me to spend and therefore we have more time to spend looking at your operations rather than just doing the compliance work.