Why are Financial Statements Important?
May 23rd 2018 at 3:44pm Published by sharpshooteradmin
You have just started your own small business and are excited about the prospects that you have in mind. However, your accountant has been pestering you with suggestions ever since you started the business and is telling you to maintain a thorough check on accounts so that the financial statements are a true reflection of the business you are running.
You are forced to thing whether your financial statements really matter to you and whether you should really spend so much time on them. You need to understand that as a business you need to take care of the financial statements that you have within your business.
In a bid to build on you the importance of financial statements, here we mention some of the reasons why they are so important for you and your business.
They Reflect Success in Bookkeeping
Once you start your business, you need to realize that everything that you invest in your business and every transaction that you partake in should be recorded in your books. The process of bookkeeping and the financial statements you eventually make through them show your financial records, and these financial statements can only be accurate once you have invested in properly bookkeeping all the details that happen around your business.
A good set of financial statements would almost always show the success that your business has been able to achieve over a period of time.
They Come in Handy for Funding Approval
Financial statements can really come in handy when it comes to the funding approval process. Your financial statements are your best bet to get that small business funding you have been looking to achieve for your business.
If you invest in your financial statements, you can rest assured that your small business funder would take you seriously. A good small business owner would realize this and would get the hassle surrounding their funding approval away in time.
If you don’t have authentic records in your financial statements, you wouldn’t be able to secure the right small business funding for yourself when the time comes. This is a troublesome situation that can impact your business in ways more than one.
Good for Investors
If you’re looking for investors to invest in your business, then your financial statements would come save the day for you. Your financial statements act as a look inside your business and can help one understand just how well you are doing.
For Your Own Planning
You can use your financial statements for your own planning purposes. The financial statements tell you just what needs to be done for your business and how you should go about it. Cash flow statements for one can help you plan your cash reserves in the best manner possible.