Financial statements are notes that become conclusions related to the financial condition of an agency. In its application, this report will be used as a benchmark for the overall performance of the company concerned. Additionally, if you also want to ensure the accuracy of your bookkeeping process, we suggest you hire the bondi junction xero bookkeeper.
Submission of information contained therein is considered as one of the supporting mediums of financial reporting. Even so, the financial statements remain very useful information for:
The compilation process uses various data sources. Starting from invoices, receipts, credit notes, reports, banks, and so forth. All of this data is used to fill in the report book and to prove the validity of the transaction.
The financial statements are prepared periodically which makes it interrelated in each period continuously and continuously. Negligence in preparing a report in one accounting period will make the report in the next period is not optimal.
Characteristics of an ideal financial statement
The contents of a report may seem confusing because the points that must be submitted are complex. Even so, the quality delivered must still be prioritized in providing the right benefits for the intended parties.
There are several main characteristics that need to be considered in preparing an ideal financial statement, namely:
Easily understood by the target
Contains relevant information
Contains reliable information
Sync with previous reports
The purpose of making financial statements
The purpose of making financial statements is to provide company financial information that will be used by certain parties in making economic decisions. Ideally, this report reflects the impact of financial decisions and events in the past period.
In general, this information involves:
Current financial position.
The company’s performance in utilizing its financial resources.
Changes in financial position concerning profit and loss in the last period.
Especially for external parties who are interested will take points from the financial statements about how the company’s management shows its responsibility in maximizing the resources entrusted to him.
Thus, external parties can make the right decisions whether they want to maintain or sell investments in the company.
On the other hand, for company owners or leaders, financial statements can be used as a reference to extend management work contracts or actually make management changes.