Running a business comes with many responsibilities. One that requires meticulous attention is managing finances. A business cannot survive without it. While bookkeeping isn’t as straightforward responsibility, it breathes a sigh of relief when it comes to financial reporting.
It is difficult to determine how your business is performing through day-to-day statistics. Financial reporting accumulate day-to-day statistics to help you make calculated decisions in the long-term.
However, business management takes a steep turn at financial reporting. Complex reports, complicated graphs, and intricate equations are daunting to eyes unfamiliar with the accounting world.
Don’t worry if hiring an accountant or getting regular consultancy sessions isn’t an option for you. We believe with the help of an accounting software, you can dare to tackle those intimidating reports and take on financial reporting yourself.
However, before delving into the financial reporting features of a software, let us look at the most common roadblocks businesses stumble upon when it comes to financial reporting.
Common Financial Reporting Problem
Problem: Creating Accurate Reports
Financial data worth reams is useless unless it is and can be condensed into a report.
Converting numbers into meaningful reports requires accurate records and an accounting expertise.
You might get an accountant to create your report for you. If not, you can find templates online. Yet, most business reports are ridden with financial inaccuracies. And it all begins with inaccurate documentation. You might be confused: What is so elusive about flawless financial documentation? Isn’t it as simple as writing down whatever transaction occurs?
An overestimation of human precision and an underestimation of the amount of transactions are responsible for your confusion. A business is not solely run on paper—most of the work is running around to get stuff done. And at the end of the day, when a tired mind meets a monotonous grid of numbers, dyslexic tendencies can arise.
Moreover, an influx of transactions from various business components bombard the books. Maintaining distinct records for each is difficult.
Solution: Automatically Record Data and Create Reports
The ease with which a software creates reports is remarkable. But it all begins with accurate recording. Reports are built on accumulation of data. A software is the best way to ensure whatever you record is not only accurate but also categorized within a specific category.
With precise and accurate records, creating a financial report is simply a matter of clicking a button.
Problem: Reports generated within a specific time period
Generating financial reports manually can only be done within period of time. You have to wait till the end of the month to generate reports. This hampers your ability to analyze data anytime you wish.
Solution: Choose Specific Dates for Generating Reports
With a software you can choose the specific dates for the report you want to generate. You don’t have to wait at all. This means you can analyze data for a specific period to determine the right business strategy.
Problem: Analyzing Financial Reports
After you’ve managed to create a report, it won’t ensure you can read what is on those reports. Understanding those reports requires an expertise in accounting. As a small business owner, you can neither expect yourself to be proficient in accounting nor afford an accountant.
But understanding those reports is crucial to gleaning meaningful insights. You can identify past mistakes and choose better options for the future.
Solution: Automated Insights Generated by a Software
Accounting Software creates reports and helps you understand them. It won’t pitch you a detailed report filled with jargon. Instead, it will use the numbers in your report to provide daily insights based on recent business endeavors. Along with projecting upcoming bills and invoices, the Accounting Software dashboard displays a cash flow forecast.
Maintaining a positive cash flow amid the unpredictable circumstances shrouding the business world is paramount. Analytics with Accounting Software unravels essential information from all your transactions to guide your financial strategy.
Problem: Financial Reporting for Taxation
Financial reporting is closely linked to taxation. Financial statements are used by tax authorities to identity the tax liabilities of a company. Without even going into the details, hearing these terms can make your head spin. Calculating tax liabilities is not an easy task.
Solution: Automated Taxation
Accounting Software calculates the tax you owe for each transaction. When it comes to financial reports, all the accumulated tax is added up, leaving you to simply deal with one definite number. Your concern is simplified solely to that one number.
Accounting Software also lets you set tax rates. If different rates apply to different goods, you can adjust them.
In the past, financial reporting was confined to expert bookkeepers and accountants. This meant businesses could not do without professional help. While professional help in managing accounting is a great to improve numbers, it isn’t the only way.
With low resources and minimal business expertise, you can use an accounting software to simplify complex accounting. It can help create financial statements, analyze reports, present graphs, and calculate taxes.