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Preparing High Quality Financial Reports

April 18, 2012 | Comments: 0 | Views: 195

For any company or business, financial reports play a very important role in their operations. They give a pure reflection of the financial performance of a company within a specified period. The reports are of great interest and importance to investors, Board of Directors, customers and other interested third parties.

It is therefore important to observe high standards of professionalism and integrity when preparing financial reports. Ensure that you use the right methods and techniques to get the clearest reflection of a company's true performance. To prepare the best reports, accountants are encouraged to observe the following phases.

1. Records all Financial Transactions

One of the most important aspects of accounting is record keeping. Companies make various purchases for services and items, depending on the nature of their business. The receipts and records of these services are source documents that should be kept safely. Businesses get clear insights into where and when money was spent, and how much was spent, and by whom.

2. Get an Effective Accounting System

With the availability of the relevant source documents, there is need for an effective accounting system. The systems are essential for the proper record keeping, and easy retrieval whenever they are needed for whatever reasons. Companies can choose accounting systems in accordance with their requirements and preferences. Three of the most popular and widely used accounting systems are; manual, accounting software programs and spreadsheet programs.

3. Compile the Report

With the right accounting systems in place for proper record keeping source and ease of retrieval, it is much easier to prepare the financial reports. All the appropriate data should be arranged according to time and amounts. This way, you can easily make the required calculations. No matter what the nature of the business is, income statements, cash flow statements and balance sheets are common features of all financial reports.

4. Management Review

Management review is also an imperative phase in the preparation of financial reports. Here, the business's progress over a specified period of time can be tracked. The management and external stakeholders of the businesses make use of different financial statements to gauge company performances. From the balance sheet and income statement, to the cash flow and other statements, there are useful pieces of information for the top management. It is through this management reviews that the managers come to a decision on the effectiveness of past strategies.

5. Make Adjustments and Publish

This is the last phase in the effective financial reports preparation where adjustments in business practices and actions are made. Financial reports show the performance of a company in a manner using numbers, and numbers do not lie. Accountants should adhere to these phases to produce the best financial reports that clearly brings into focus the financial reality of the business.

Lee is an experienced and competent writer, especially in business related niches. His articles are opinionated, informative and at times controversial. His honest approach is designed to assist the reader make informed decisions on areas very important to our daily lives.

For more information on accountants and, accounting information and the latest accounting job openings, visit miimarket today!

Source: EzineArticles
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