Last updated: Feb. 14, 2018
As a small Canadian business owner, having accurate and organized financial statements can help you run your business more efficiently and effectively.
Financial statements are a barometer of your company’s success. Your business’s financial statements can include information on income, capital expenditures, cash flow, balance sheets, etc.
Financial statements also let others know how well your small business is doing. If you want your business to continue to grow and be successful, your balance sheet, income statements and other reporting are an important part of the process.
How Accurate Financial Reporting Can Help Your Business
Below are 7 ways that accurate financial reporting can help your small business grow.
1. Help in Identifying Your Success
Accurate financial reporting and financial planning lets you know how well your small business is doing.
This isn’t just peace of mind for you. It lets investors, shareholders, and creditors know too. In fact, financial statements are all the proof you need to show your small business is on the right track.
2. Identify Business Opportunities
Having accurate financial statements gives you a clear understanding of how your business is doing.
You can use that data to help make important business decisions.
For example, do you have enough money to expand the business? It can also help identify business opportunities for future growth.
3. Build Trust
Accurate financial statements build trust. Investors, vendors, and lenders need to know that your small business is successful and that they can confidently put their hard-earned money into it.
Keep in mind, it takes more than a balance sheet to show how well a business is doing. Many large companies, including Enron showed they were making a profit; unfortunately, creative accounting helped hide their losses.
No one wants to lose a business because their financial statements aren’t in order or up-to-date.
Tax experts can help ensure your financial statements are in order and help build trust in the business community.
4. Expand Your Business
Your company’s financial statements can help you expand your business.
Potential clients, investors, and suppliers will want to see your track record before they decide to do business with you.
Having well organized and accurate financial statements can help you get loans at the best rates with lenders.
5. Help Reduce Tax Burden
The more successful your small business is the more taxes you have to pay. Financial statements show you not just where your money is going, but all the possible tax breaks and loop holes you should be taking advantage of.
A tax expert that specializes in small businesses can maximize your deductions and reduce your overall tax burden.
6. Help at Tax Time
Accurate and up-to-date financial reporting means your business is better prepared come tax time.
Regular financial reporting ensures your corporate accounts have been settled and resolved well before you need to report your taxes to the Canada Revenue Agency.
7. Reduce Errors and Mistakes
Accurate financial reporting and planning can help you catch costly mistakes.
If you want to grow your small business, it’s imperative that your financial statements are in order.
If you’re struggling to keep your financial statements in order and up-to-date, hire tax professionals with the expertise and experience needed to help you grow your business.
How Often Should You Prepare a Financial Report?
There is no one-size-fits-all approach when it comes to preparing and analyzing a financial report.
As a small business owner, you only need to file your taxes once a year and you probably also do quarterly payments. But chances are, you look at your accounts regularly, maybe daily and in some cases hourly.
This same kind of frequency can apply to financial reporting. You might only do it annually or quarterly, but you may still want to conduct interim reports whenever the need arises, which isn’t uncommon.
In this competitive environment, your small businesses strategy might be in a constant state of flux.
As a small business owner, there are a number of reasons why you should constantly analyze your company’s financial statements and reports.
In general, it’s a good idea to prepare a financial plan quarterly, or semi-annually.
If the business is having problems with cash flow, it would be a good idea to prepare financial reports more often.
Likewise, if your small business is experiencing strong growth, it might make sense to prepare a financial report more frequently.
This allows you to measure your performance more efficiently, develop new strategies, or change any issues that could impede growth.
Many business owners tackle financial reporting and planning on their own. But there is one really big reason why it’s best to let professionals do your financial reporting and planning: objectivity.
They want to see your business succeed just like you do. But they don’t have any emotional attachment.
An objective tax planner will look over all of the variables and help you decide what’s best for the business.
FBC, Helping Business Owners with Financial Reporting & Planning
Having access to accurate, organized financial data is critical for making successful business decisions. Big businesses have full accounting departments that take care of this. But it’s a different story for small business owners.
Simply running the business, sending out invoices, and paying bills takes precedence while reviewing, analyzing, and reconciling financials gets pushed aside. At FBC, we have the experience and expertise to help your small business grow.
Since 1952, FBC has worked exclusively with small business owners, farm operators, and independent contractors, helping them take care of their bookkeeping, payroll, taxes, financial planning, and financial statements.
At FBC, we understand that no two businesses have the same financial reporting and tax planning needs. That’s why we are the only accounting firm in Canada to provide a unique service.
For a fixed fee, Members get year-round access to our tax planning, tax preparation, consultation, bookkeeping, and financial planning services. FBC also provides all new Members with a review of their previous 3 years’ tax returns.
For more information on FBC and the services we offer, call us today at 1-800-265-1002 or submit an online form and an FBC tax specialist will contact you at your earliest convenience.