Learn the Importance of Statutory Financial reporting?

1. Learn the Importance of Statutory Financial reporting?

2. Industries have multiple departments that work the whole day to achieve organizational goals. Maybe the functioning of these departments is dependent or independent, but in the end they all linked to a common thread called the Finance department. This department records and maintains the financial aspects of each department. If you are a finance manager or a director, then you very well understand the importance of financial statutory reports. So, let’s delve deep and discuss what financial statutory reporting is. Statutory reporting is the mandatory submission of the financial as well as non-financial information. The objective of this reporting is to track and analyze the financial health of the business. Preparation of financial reports includes preparation of credit reports, balance sheets, cash inflows, etc. Isn’t it interesting to know what benefit this financial statutory reporting provides? So to round off the thing, let’s go deep into the benefits: Liabilities: Liability is an obligation of the entity arising from past events. Managing the liabilities of an organization is one of the important tasks. It also helps the investor to decide whether your business is a good place for investment. Get Credit when you require it: One of the key benefits of financial reporting is that you get the credit when you need it. Lenders need some type of guarantee to provide you a loan. Your credit reports and balance sheets serve as a guarantee for a lender because they represent how much you already owe and what is your current state cash flow.

3. Track Cash flow: Financial report is one of the best choices to track the business cash flow. It also helps in finding out the answers to these questions: • • • • • Where is your business money coming from? Where is your business money going? Is your business making profit or loss? Whether your business is performing or not? How is your business growing? Decision-Making Tool: Financial statements represent your business trends that indicate how your business is collecting the money and at what rate creditors are paid. Also, it provides information that is useful to investors, creditors, as well as for making economic decisions. Improve debt management: Debt can damage the progress of any company regardless of its sector. So, here the Financial statutory reporting comes in. It helps in tracking your current assets and managing your debt accordingly. If you understand all these benefits clearly, then you can easily maintain good records.