An Overview of Financial Reporting

Creating a successful business isn’t just about selling products or services. It’s also about making smart decisions based on your company’s data. Having the ability to look at the current and projected financial health of the business is vital if you want to scale or invest.

However, financial reporting often requires an expert eye with experience to compile the data effectively. Therefore, to gain a good overview of their business’s financials and decide what steps to take next, it is strongly advised businesses seek professional services from a financial reporting accountant.

If you’re wondering whether or not you need one for your business, here are some things to keep in mind.

What is financial reporting?

Financial reporting is the comprehensive review of financial data through the tracking, analyzing, and reporting of your business income. A periodic and accurate financial reporting process helps you understand your business’s financial standing and the opportunities you can pursue and strategic changes you should make based on these important insights.

What is a financial reporting accountant?

A financial reporting accountant is a fully qualified accountant or certified public accountant (CPA) who specializes in financial reporting tasks. These reports and financial statements are required for a business to comply with regulatory requirements and for successful business planning and forecasting.

What Role does a Accountant Play in Financial reporting?

The accountant responsible for financial accounting and reporting sits within the finance team of a business. Their role includes regular liaising with business owners, stakeholders, and other individuals to provide the necessary reports. Using these reports, they also provide strategic recommendations and advice to assist with decision-making. Their main roles and responsibilities are:

• Properly compiling, maintaining, and classifying reports
• Tax reporting, inventory processing, and program administration
• Research accounting rules and regulations for making recommendations regarding company policy
• Public reporting of the business’s financial status
• Identifying trends and forecasting future requirements, and making recommendations based on this knowledge
• Compiling reports and presentations to business owners and other stakeholders to communicate results and financial information

What Types of Reports are managed by the Financial Reporting Accountant?

Financial reports provide business owners and other stakeholders with an accurate and detailed view of the company’s finances. They are presented as formal records and typically include the following reports:

• Profit & Loss statement
• Cash Flows statement
• Balance sheet

The reports above are legally required documents for filing your business taxes.

What are the Benefits of Having a Financial Reporting Accountant on Your Team?

There are numerous reasons why a financial reporting accountant is highly beneficial to your business. They are highly qualified, analytical, and organized individuals who possess the right skills to take your business further. What you can expect:

• Better debt management: A financial reporting accountant will give you direct insight into your business assets and liabilities. Through this insight, you can understand how you can better manage your debt.
• Make sound decisions: By analyzing the financial statements, your accountant will be able to make recommendations for important financial decisions.
• Compliance: Staying above the law and its regulations is vital for all businesses. Solid financial records and reporting will ensure you achieve this.
• Taxes made easier: Certain financial reports are required by law when you file your taxes. If you already have accurate records, it saves a lot of time and reduces the margin for error.
• Transparency: You will attract far more external investment opportunities if your financial records are clear and easily available.

Do the Reports Provide Advice on Investment Decisions?

Financial reports provide investors with some necessary insight in order to help them determine whether or not they will invest in your business. Public companies also have many pages of notes to their financial statements that will provide guidance on how the accounting was done. They give a more accurate and transparent account of the health of the business, and this is vital for building trust and reliability with would-be investors.

Ultimately, financial reports are necessary tools when seeking investment from outside parties.

Do Financial Reports Determine Business Valuation?

No. The types of reports we have discussed in this article don’t report on the overall value of the business. To understand this, you would need to perform a proper valuation which takes many metrics into consideration to get the final figure.

Do Financial Reports Predict Future Cash Flow?

Yes. The information provided in quarterly financial reports can assist a business in predicting future cash flow. This is achieved by analyzing the historical data against trends and other factors. The data can then assist in forecasting the future performance of the business.

How to Find the Best Financial Reporting Accountant for Your Business?

Most small to medium-sized businesses want the advantages provided by a financial reporting accountant without having to pay a full-time accredited business accountant salary. In fact, many businesses don’t have a requirement for a full-time accountant, nor do they have the office space.

However, there are some great solutions out there. Finvisor is the perfect option for businesses that need financial reporting services without paying the hefty regulatory reporting accountant salary.

Hiring a virtual financial reporting accountant allows you to get the data and reports you need as and when you need them. In short, you only pay for the work you require. As your business grows, you can increase the services you get from your accountant.

It’s a fantastic cost-effective solution that gives you access to experienced accountants and financial reporting as and when you need them.

What to Look for When Hiring a Financial Reporting Accountant?

Before you start looking, ensure you have compiled a detailed financial reporting associate job description of the duties and tasks you would like your accountant to perform. That way, when you search for the right individual, you can match their resume with your requirements.

• Try to find an accountant with experience or knowledge of your industry
• Always ask for solid examples of how they used their skills to make improvements.
• Ask to see their resume.
• Ask for examples of how they overcame obstacles and problems.
• Do you have a good rapport with them? Do you like how they organize their workload?
• How do they plan to share their reports and findings with you?

The answers to these questions will determine whether or not they are the right financial reporting accountant for you.

In conclusion, financial reporting is an essential part of running a successful business. It is especially vital if you’re looking to attract outside investment so you can grow your business further.

However, having the skills of a financial reporting accountant doesn’t need to come with a high price tag. Get in touch with Finvisor today and find out how we’re helping businesses across the US get access to the skills they need when they need them.

*This blog does not constitute solicitation or provision of legal advice and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction.*