Financial records help monitor your firm's profitability. The preparation of financial reports often requires the specialised services of a qualified accountant. However, the accounting professional will need access to specific company data to perform their tasks effectively.
Read on to discover the different types of company information your accounting expert will need.
Annual Financial Reports
Each business must prepare its income or profit and loss statement, balance sheet and cash flow statement every year. These financial reports allow investors, shareholders and managers to monitor the business performance and make critical decisions about its future.
The profit and loss statement outlines the business expenses, income and net profit or loss. The balance sheet showcases your firm's assets and liabilities at the end of each accounting year. A statement of cash flows outlines all transactions made on your cash account for that year.
A certified accountant prepares these financial reports to ensure uniformity and accountability across the board. Oftentimes, they will need access to your financial statements from previous years. The accountant can make comparisons and determine the balance that needs to be carried forward from the previous year.
Your business accountant can state whether your business is making a profit or loss from these documents. They can also offer advisory services on minimising expenses and reducing annual losses. These documents also come in handy when the accountant files your company's returns.
Your business accountant needs access to your bank statements for record-keeping purposes. Bank account statements provide the cash flow records through your company's bank account. This information is necessary to determine the business's expenses and income.
However, some business owners may not be comfortable with their accountants having access to their bank accounts. If this is the case, you can have your bank grant the accountant view-only access.
With view-only access, your accountant can view the transactions and extract the information they need, but they can't perform any transactions on the account. The accountant cannot grant anyone access to your account, nor can they move your money.
The payroll contains crucial employer and employee data that most businesses keep confidential. Payroll data includes employee personal details, pay rate and frequencies, extra wages and employment benefits. They also contain employer information such as payroll liabilities and bank account information.
The sensitivity of the information in your firm's payroll records might make you hesitant about granting an accountant access. However, a competent commercial accountant will ensure the highest levels of integrity during the period that they'll work with your company.
Furthermore, they need access to your company's payroll data to record the business's expenses from the wages and salaries. They also need information on net employee payments, insurance records and any bonuses you extend to your employees. They need this information to help your business comply with your state's tax regulations.
For more information, contact a commercial accounting firm near you.