Assurance statement template, Financial Statements are a group of scores and statistics not unlike the scores and statistics that show up after a sports game. For a sports club owner or supervisor, the statistics, replays, opinions, and the score, are a vital part of assessing, tweaking and improving the match. They’d never ignore them. It’s their way of increasing the win rate. In contrast, company owners and managers, more frequently than not, it seems, view their financial statements as a necessary evil to fulfill the I.R.S.. They are totally unaware of the power of these reports, or they simply choose to dismiss them. Many business owners are delighted to turn the accounts over to a bookkeeper or accountant to analyze.
So, what’s wrong with that? Well, for starters, once the business owner doesn’t use the financial reports as an instrument, profitability relies more on luck than strategy.
To be aware of the status the way your business has been doing throughout the year another major factor and you have to keep this factor in mind as well. In case you have been operating your company for quite a while, earnings and sales amounts are important things you have to consider. It is possible to get different types of statistics and figures and know the impact of things in a lot better way.
Then, there’s the control problem. Who is controlling your business? Do you have controls in place? From experience, I can tell you that when the owner does not understand what is happening with the finances of the business, there is ample room for corruption. Would you know if someone had been stealing from you? Sometimes it’s little seemingly trivial skimming and other times it is similar to grand theft. It happens all of the time and the business owner is often completely unaware.
The solution is for the business owner to become knowledgeable in the financial aspects of the business. This does not mean they have to become an accountant. But, it’s critical that they become knowledgeable about the accounting model set up. They need to understand the language. Business finance is no more challenging to understand than most other elements of running a small business. It is probably easier than some aspects. The three main financial reports are The Balance Sheet, The Income Record and the Money Flow Statement. The main Key Performance Indicators are within these three reports. It’s a cake walk! Are financial statements that your friend or foe? Friend, definitely friend! Pick out the luck from adulthood.