If you are running a business in South Africa, you need to understand the importance of financial statements for small businesses. These statements accurately reflect the performance of your business performance and the financial position of your company. Apart from that, they help all stakeholders, including managers, investors, and financial analysts, to make the best decisions. Furthermore, by analyzing financial statements, you can also predict the future performance of the company.
We understand that you are busy with your business. That’s why we are here. If you need help with your financial statements, GET IN TOUCH with us today and we will gladly assist you.
What Are Financial Statements?
Financial statements are documents that show your company’s current financial standing. These documents provide the following information:
- How much money the company is making and spending as displayed on the income statement.
- The assets owned by the company and how much it owes, as shown on the balance sheet.
- The source of the money and how it was spent, as displayed in the statement of changes under financial position.
- Retained earnings, which is money being kept by the company owners.
The Importance of Understanding Financial Statements
As an entrepreneur, you need to know what to look for when holding financial statements for small businesses in South Africa. If you can understand the information on these documents, you can make informed decisions about your business. There are many insights that you can gain at a glance, and some will require deeper analysis.
Financiers and investors understand financial statements. By looking at these documents, they can easily decide whether or not it is a good idea to put more money into a business or withdraw it.
How Are Financial Statements Constructed
Financial statements are drafted using a specific set of rules known as the International Financial Reporting Standards (IFRS) to make it easier to study and compare data across companies. In South Africa, financial reporting is also governed by an extra set of rules.
To understand more about these rules, you can get in touch with us here. The rules state the following:
Financial statements should be constructed on either a cash or accrual basis.
There should be an attached cover letter stating the type of financial statement.
You must include some notes on your financial statements to indicate the assumptions made by the accountants to prepare the reports. The notes also help readers with interpretation and analysis.
We Can Help With Financial Statements for Small Businesses in South Africa
We understand that accounting rules can be confusing. That’s why we are here to make the job easier for you. Let The Books Consulting handle all your financial statements and other accounting heavy loads so you can dedicate more time to what’s essential for your business. Hire us today to prepare your financial statements. We have been creating financial statements for small businesses in South Africa for years, and you can rely on our quality and experience.
Please send us an email at firstname.lastname@example.org or give us a call at +27 12 012 5831