Your financial statements help you to make intelligent business decisions each day, but did you know that they are also needed if you want to apply for a loan or integrate an investor in your business? That is why properly understanding them and integrating them into your accounting processes is vital.
Let's explore the financial statements universe together in 4 steps.
First, let's start by defining what financial statements are. Financial statements are a set of documents which attest to your company’s current financial situation. They provide you or potential investors with an overview of your income and expenses, your possessions and debts and are an excellent indicator of your company’s performance.
Financial statements are made up of three main documents:
Together, they offer a clear picture of your company's financial health.
In addition to providing you with an overview of your company's financial situation, financial statements also have more specific objectives:
To facilitate the understanding and analysis of financial statements, there are accounting standards and principles that you can follow. These standards vary according to whether you are a publicly traded company (IFRS) or a private enterprise (ASPE).
It is not mandatory for private enterprises to follow the standards. They exist to ensure a certain level of compliance so that those who will be using financial statements to make decisions feel more confident and secure. Regardless of the type of enterprise, the only standards that must absolutely be followed are tax laws and government legislation.
Understanding and following these rules can be complicated and that's why some companies decide to have their financial statements prepared by a professional accountant.
Not only will a professional accountant produce your financial statements according to current accounting standards and rules, but they will also help you to analyze them correctly so that you can draw the appropriate conclusions and make the right decisions for your company afterward.
Whether or not you decide to have your financial statements prepared by a professional accountant, the management of your daily finances partially remains in your hands and having the right tools, such as the right accounting software, will greatly facilitate your operations and help you ensure the proper functioning of your business.
Are you looking for a solution to manage your accounting? Contact our team of experts to learn more about our many specialized tools!Discover Acomba
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