Every owner wants to know how their business is performing, therefore it is important for every business to reflect on their status in financial statements.
Financial reporting is a process of producing statements that discloses businesses’ financial status to management, investors and the government. This is a formal record of the financial activities and position of a business. The financial statement includes Profit and Loss, Balance Sheet and Cash flow statement.
Preparing a financial reporting on a timely manner is important as this provides information about the financial position, performance and changes in the financial status of the business. The Financial reporting is useful and is required for ranges of stakeholders such as: Business Managers, Business owners, Investors, Financial institutions, suppliers, customers, employees, general public and Government agencies such as Tax Office and ASIC.
Benefits of having financial reporting: