Importance Of Company Financial Statements
Preparing company financial statements are the most basic yet essential business reports that are prepared every fiscal year to have an overview of the financial standing of any firm—be it a small business, startup or a large organisation.
These statements provide financial data that investors, creditors and analysts could use in evaluation of a company’s performance.
Today, we’ll look at the importance of company financial statements, in terms of various aspects of business, i.e., from making decisions to serving as an instrument to gain the trust of shareholders.
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Importance of Financial Statements for Your Business
The significance of preparing financial statements prevails in diverse business aspects. Below are some of the important functions of financial statements that you should be aware of.
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Loans/Availing Credit
Most lending institutions ask for previous years company financial statements when asking them to provide additional funds for expansion, buy machinery, hire new employees, etc.
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Information to Shareholders
Company financial statements aid investors to decide whether or not to invest in a particular firm. The historic information helps investors derive the viability, profitability and longevity of a business, helping them make sound investment decisions.
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Budgeting
Whether the goal is to increase revenue or expansion, financial statements will allow you to look at the current financial scenario of a company.
The reports show you an overview of all revenue channels and expenditures, which helps you cut down unnecessary costs and boost the revenue channels that are set to grow.
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Tax Assessment
When filing tax returns, it is important to have company financial statements handy. This helps tax authorities to ensure the accuracy of taxes paid by an organisation.
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Financial Management
When it comes to planning, organising, directing and controlling the financial resources of a business, it is important to have both present and historical financial statements.
As this will help financial managers to make decisions pertaining to investments, capital, cash flow management and so on, for achieving short- and long-term goals.
Also See: 10 Incredible Benefits of Outsourced IT Support for Your Business
Gain Insights from Financial Statements in No Time
Reading and interpreting company financial statements take a lot of work and are quite time consuming. For this, having a good command over accounting and financial terminologies and workings is important. But, it is completely alright if you don’t have those skills. As with Dun & Bradstreet’s Direct for Finance API you can gain insights and help manage the financial function effectively and efficiently.
Dun & Bradstreet’s Direct for Finance integrates its business intelligence insight and capabilities directly into a business workflow and accounting systems and cuts through intricacies processes, further reducing friction in the sales cycle.
Dun & Bradstreet is a prominent global provider of business data and analytics that enables companies around the world to improve business performance, instill confidence among customers, accelerate revenue, mitigate risks and so on. So, if you want to transform your business and take it to the next level, you should consider employing their business intelligence tools. To learn more about their Direct for Finance or other platforms, you can visit their official website.
Now that you have got everything to level up your business, start making the most of this informative blog and give your company the much needed boost.
Disclaimer: This is a collaborative post on behalf of DNB, but then again as always, we are devoted to providing content that is supportive and valuable to the readers.
