Oftentimes, fast-growing companies tend to get busy securing customers and forget to evaluate their financial health status. And, based on an article from Forbes, failure to assess financial growth will lead to deep falls. However, judging a company’s financial status is not that easy, especially if you don’t have tangible and reliable material that presents financial details, like reports. This is where accounting forms come in handy, like financial status reports. With this, you will be able to present various accounting information of your company. In this article, you will be able to know and understand what financial status report is all about and its purpose. You will also gather tips on how to create a professional and competent financial status report. Scroll down below to see more.
What is a Financial Status Report?
According to an article from Chron, the constant monitoring of your business’ financial health has a significant impact on its success. It gives several benefits, especially when it comes to formulating action plans, strategies, etc. That is why it is a necessity for companies to issue or provide financial statements from time to time to evaluate the company’s financial growth. Hence, the availability of financial status reports.
A financial status report is an accounting document that discloses financial information and figures of the business. Financial status reports can happen quarterly or annually, depending on the financial data you want to document. Although it is necessary to comply with the law and accounting standard practices, financial status reports also help the administration in decision-making, planning, forecasting, and identify company work status. It also allows the management to vary and communicate the previous successes and the future expectations of a company.
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3. Financial Status Report Form Template
4. Annual Financial Status Report Template
5. Simple Financial Status Report Template
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7. Format of Financial Status Report
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11. Monthly Financial Status Report
How to Make a Financial Status Report
Inaccurate financial reporting can lead to severe problems, as stated in an article from Chron. This may be caused by misinformation, misinterpretation of financial data, miscalculation of figures, or simply carelessness. That is why it is essential to make sure that all figures are clear and presented well. If you are in doubt in making one, you might as well follow our easy-to-understand tips on how to make a reasonable, competent, and accurate financial status report. Here’s how.
1. Decide on the Timeframe
Before you begin making a financial status report, you have to identify the timeframe that your financial report will cover first. From there, collect all the necessary figures and data that are relevant to incorporate in the report. If you have no idea of the timeframe financial reports, you may review and evaluate the governing documents of your company—bylaws, articles of incorporation, etc.
2. Gather Necessary Data
Once you have already identified the reporting period of your financial status report, the next thing you need to do is to collect all financial figures it covers. Start with your income statement, balance sheet, profit and loss statement, cash flows, and other accounting documents that fall within the same timeframe. Make sure that you have access to all information from the first data recorded down to the last one to have efficient and reliable information.
3. Observe Accuracy and Clarity
As stated above, the unclear and inaccurate presentation of financial data and information can result in significant problems that your company may face. That is why there is always a need for research after research and evaluation after evaluation. This is to ensure that all the information gathered is defined and is based on the specified period. Business documents like the financial status report should be free from errors since this is one of the many essential documents that companies must evaluate to come up with concrete and effective action plan and strategies. Hence, it should be professional and consistent.
4. Outline the Financial Report
Accounting documents like income statements, balance sheets, financial status reports, etc. should be written in an organized manner, including all data and figures to be presented professionally. That is why you have to make sure that the outline and format of your status report should also be presentable. In doing so, you may utilize graphs or tables to show figures precisely. Using legends would also help in presenting your financial figures to give clarity on your status report.
Why is financial reporting necessary?
There are seven specific reasons why constant company financial reporting is important. It helps business owners in mitigating errors, evaluation operations, examining cash flows, determining financial conditions, and in company decision-making. Financial reporting is essential for tax purposes.
What should be in a financial report?
Financial status reports should contain the necessary data to present the overall financial status of a business at a specified time effectively. This should include the external financial statements, which are the income statement, statement of comprehensive income, balance sheet, statement of cash flows, and statement of stockholders’ equity. Financial status reports should also have financial statement notes, information regarding quarterly incomes, quarterly or annual stakeholder reports, financial data placed in the business website and issued to government sectors, and a report about the issuance of common stock and other securities.
Indeed, constant evaluation of financial status through reports and statements is essential for a business to succeed. Writing a financial status report does not only allows you to have a picture of the financial status of your company but also helps in terms of planning and decision-making. It also counts for the company’s general funding, business financial plan, and budget adjustments. That is why it is necessary to make sure that everything that is written in the status report is accurate, informative, and should make sense. So, if you want to have a professionally written and accurate financial status report, you have to consider even the tiniest bit of information.
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