Financial
Reporting
Financial reporting is done
by every business and organization to assess its financial performance.
It is an indicator of how well or poor a company has performed in a
particular financial year.
Financial reporting involves preparation of financial reports or
financial statements and then studying the overall performance of a
company. These financial statements give a summary of a firm's long and
short term profitability.
Financial reporting involves making the following financial statements/
reports:
- Balance Sheet: This is one of the most important
financial statement containing the assets, liabilities and net
equity of a company at a given point of time.
- Income Statement: Also known as Profit or loss statement,
this financial statement reports company's results of operations
over a period of time.
- Cash Flow Statement: This statement reports company's
cash flow activities, including its operating, investing and
financing activities.
A company's financial reporting is done based on the above
financial reports or statements. Since understanding & analyzing the
information can be a tough job, companies these days are delegating the
job of financial reporting to professional accountants. This helps the
management get an accurate analysis of their financial standing and also
helps them make strategies for future.
Advantages of Outsourcing Financial Reporting
- Accurate analysis
- Improved decision making
- Helps management make future strategies
- Less time consuming
- Requirement of less manpower
- Cost efficient
