Beyond the record creation process, accountants use the information gathered for analysis and interpretation. Accountants are usually concerned with understanding the meaning of the amounts they obtain, and they look for the relationship between business events and financial results.

In this sense, an essential part of this understanding is creating reports, especially for people who can make decisions about companies’ actions without accounting knowledge.

A Financial report is a document that transcribes a personal or group reflection on a defined topic with the intention of favor decision-making. Accounting professionals capture everything observed about the company’s financial situation, structured in an understandable way for senior management, lawyers, banks, and even suppliers.

A Financial report structure includes a header, a summary of the company’s most relevant aspects, the report’s objective, identification of problems, analysis of the causes, recommendations, and conclusions. 

Header. Lists the company’s name and the financial statements with their correspondent period. The report’s title refers to the subject to be discussed, date, and place of the analysis.

Summary. Lists the activities carried out by the company, the commercial and legal characteristics, and its main short-term and long-term objectives. 

Objectives. Lists the purpose and the area of the company that will receive the report. 

Problems. Lists all of the issues that led to the report’s preparation; it is described in detail and summarized; generally, analyzing different indicators.

Causes. Clearly and concisely lists the problems identified in the previous point. It may include graphs to make the information clearer and precise. Financial Statements can be summarized, highlighting the most influential figures in the study carried out. 

Recommendations. Provides a clear and brief description of what the company can do to solve the problems, quick findings of the situation, and suggested course of action to address the issues.

A Financial report should list all the names of the people who worked on the report’s preparation, their respective identification numbers, and their position in the organization. 

Initial research is vital to gather relevant data critical in meeting the company’s needs, maintaining order, breaking down relevant data as evidence, and following parameters to avoid misinterpretation of the report’s data.

Conclusions. Financial reports must include a detailed analysis of the results obtained, compare the figures with the goals, financial projections, percentage of sales, and other ratios that explain each trend’s reason and the increase or decrease of state items. Consequently, a series of reasoning, such as liquidity, indebtedness, and profitability, should be included.

Financial reports must have a specific target audience in mind, either the company staff or the general public. Their objective can be to evaluate company operations, detect weaknesses and strengths, and establish corrective measures, giving shareholders the possibility to decide whether to continue contributing or participating until verification of compliance or not with the taxes generated.

The report presented must comply with specific attributes that distinguish it from any other and contribute to support an adequate image of the company. These attributes are clear, clean, accessible terminology, well written, concrete, and well presented.

Finally, the Financial report’s presentation must be neat and legible, addressed to the intended audience, and include indexes to know the company’s reality. When placing information, it is vital to consider the most relevant evidence and have the professional ethics to carry out the report.

By Andrea Diaz

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Toronto Entrepreneurs Conference @ Mississauga

May 08, 2019 Our B.E.S.T. (Business Entrepreneurs Services Team) Group has participated in this event for first time. Toronto Entrepreneurs Conference and Trade Show is the largest Entrepreneurs event in Canada. The event which targets business owners, partners or...

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September 04, 2018 RGB Accounting will participate in this event for a second year in a row. Hispanic Fiesta will be held at Mel Lastman Square in Toronto during the Labour Day Weekend, August 31st, Sept. 1, 2, & 3, 2018. Hispanic Fiesta is a four-day celebration...

Secure Your Future Seminar 2018

June 20, 2018 This event gathered business owners running a small or medium-sized business, self-employed and incorporated businesses willing to learn tax saving strategies to help them utilize their company assets to secure their retirement. We are proud of having...

2nd Latino Business Expo Show

May 19, 2018 The 2nd Latino Business Expo Show held on May 19th at Daniels Spectrum gathered a wide range of entrepreneurs and business owners avid to learn how to take their businesses to the next level. RGB Accounting participated as vendor and speaker at this...

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September 04, 2017 Hispanic Fiesta, a celebration of Spanish and Latin-American: Arts, Food, Music and Entertainment, is a four-day celebration filled with the splendid sounds, tempting treats and colorful culture featuring 300 local, national and International...

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On April 19, 2021, Deputy Prime Minister and Finance Minister Chrystia Freeland tabled in the House of Commons the Liberal Government’s first federal budget in more than two years, A Recovery Plan for Jobs, Growth, and Resilience (Budget 2021). Budget 2021 contains...

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