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Financial Statement Best Practices

A good financial system is vital for your business. Not only will a properly prepared financial statement tell you what’s transpired in your business, but will also give you a snapshot of your future.

  1. Core financial statements should be generated after each month’s close, as there could be unanticipated expenses that could create speed bumps for your business.

  2. Make sure that the latest data is made available to the stakeholders and the decision-makers at all times.

  3. Consistent reporting of your Company’s financial statements, which makes it simpler to identify trends and anomalies.

  4. Create a budget at least annually as a way to benchmark its financial performance throughout the year.

  5. Benchmark the information available through management reporting and compare the same with the industry standards.

  6. Create and update its cash flow forecasts regularly so that it is prepared for future events.

  7. Have regularly scheduled meetings with the finance team to review core financial statements and other KPIs.

  8. Scheduling periodic internal audits to ensure data accuracy and completeness.

How do I get the information I need?

Accurate, complete, and timely financial reporting isn’t something that lands on your desk with minimal effort. It requires a certain degree of expertise and knowledge to assemble the correct data and put it into a report that is not only consistent but also makes the most sense for the management of your business.

One of the best ways a business can get the answers that good financial and operational reporting provides is to retain a CFO. If you find that a full-time CFO isn’t appropriate for your business, there are alternate solutions. By retaining a part-time or project-focused CFO, a smaller business can receive the same quality of information and vital financial expertise as a larger enterprise. A CFO knows what exactly you and your business need to know and gets it to you. They can help you leverage existing resources by performing the functions of cash management, strategic and profitability analysis, long-term forecasting, and scenario modeling.

Every business is unique in its operations and strategic direction. A business’s goals can be best achieved by expending only the resources that are necessary to resolve a particular issue. This enables remaining resources to be deployed in other areas of the business to propel it forward. Accurate and timely financial information, however, is a must.

Every potential business decision should be evaluated with the help of financial scenarios. Accountants wouldn’t be able to help you with scenario-based decision-making. For a business to prosper, it’s important to make careful and well-thought decisions. A strategic CFO can help you in analyzing and evaluate the various potential decision scenarios and help you figure out an appropriate, optimal decision. They could provide you with a different perspective on important matters. If you are still wondering whether you should hire a CFO or not, just consider hiring a part-time CFO.


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