Accurate financial statements and its importance

Aplau Level 1

May 4, 2017, 5:20 am

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Accurate financial statements and its importance

Accurate financial statements plays the vital role before taking any major financial decision. If information entered is incorrect, then there will be financial loss even if right decision is taken on the incorrect information. You also get benefit with transparent financial information, evaluate better tax liability, save from costly mistakes, trust building, good decision taking, planning & forecasting.

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fishmonk

fishmonk

Yes, what you state is pretty accurate. As a business analyst, getting wrong numbers is a big no-no. You want accurate data to allow you to make good decisions and address issues with your business. Besides, your mistakes will be found out by your auditor as well.

7 years ago

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Baburra

Baburra

I agree. When I was younger, I was much less concerned about this and was much more loose with this as long as I knew we were doing well and making a profit. Nowadays, though, I make sure everything is tracked because not only can it be helpful in knowing if you are doing anything wrong, but it's also very helpful in knowing where you could focus on making improvements. Profiting may be the most important thing, but it is not the only important thing and sometimes being diligent in tracking your finance can lead to better revenue or even at least less mistakes and expenses.

7 years ago

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Barida

Barida

One key aspect of every business is the need to have a good accounting section that ensures that everything about the business is being taken care of. I mean once we can be able to do so, it's a sure way to keep the details of the financial position of the firm in good terms.

7 years ago

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coolavender

coolavender

What @Aplau said is true. That is why accounting is more than just data entry or clerical stuff. There are measures to check accuracy of records after data encoding. Accountants and auditors perform bank reconciliation and accounts analysis. There is also such thing as double entry bookkeeping where total debit amounts should match total credit amounts. In a typical payment processing system, an encoder may type an invoice amount for payment on a voucher. The voucher goes through verification to see if the amount entered matches with the amount on the attached invoice or bill. The accounting entries are also checked for correctness. These basic checks and balances help assure the accuracy of financial data.

7 years ago

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Pixie06

Pixie06

Financial statements must give a true and fair view of the accounts. Misstatements and other errors can have a large impact on the organisation. The companies rely on these statements for budgeting and investment purposes. Prospective shareholders consider the accounts before buying shares in the company. The bank will issue a loan or other facilities to a company only after considering the accounts. If your financial accounts are not well prepared you may incur additional costs and in case there has been window dressing this will negatively affect the company.

7 years ago

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Corzhens

Corzhens

When I had my business, I always take time to make the monthly financial statement. Although I already have a clear idea of our financial standing if we were profiting or not, I still wanted to see the accurate figures. Some businessmen have the knack for business that they don't really care about the financial statement which they delegate to the accountant. And since they are business savvy so that is not an issue. But for beginners, I guess you have to stick to the rules and have the financial statement tell you of the present condition of the business.

7 years ago

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treecko142

treecko142

Well yeah, not to mention that you are bound by law to maintain an honest financial statement, which is why people who have decently-sized businesses should hire a certified accountant just to handle the preparation of these important matters.

7 years ago

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