Financial Reporting is one of the most fundamental aspects of running a business. Any business. Without accurate financial record keeping, you open yourself and your enterprise to a world of problems that could have easily been avoided. Below are 6 reasons why Financial Reporting is important to any business.

1: It Enables You to Get More from Your Budget

If you do not have an accurate account of what is coming in and what is going out, it is nearly impossible to create a budget. Financial Reporting allows you to know at any given time where your company stands financially, while also allowing you to spot trends, make projections and budget for the upcoming year. With a dependable budget at your disposal, it is far more likely you will achieve your business goals.

2: It Enables You to Keep Your Business Running Smoothly on a Day to Day Basis

This is no doubt related to point #1 but it deserves a space of its own because we are not just talking about long-term budget-related issues. We are also talking about the ability to meet your payroll, the ability to reward outstanding employees instead of losing them to the competition, the ability to engage in charitable efforts, the ability to weather sudden and unexpected downturns created by forces beyond your control, and much more.

3: Accurate Financial Reporting Simplifies Your Relationship with the Taxman

No one wants to hear the words "tax audit", but they likely will if they do not keep accurate records of income and expenses. If you do a good job at Financial Reporting during the year, tax season will not turn into a stressful ordeal. There is nothing worse than trying to figure out long after the fact what happened to this money or that, or why certain expenses did not get accounted for. If you keep timely, accurate books your relationship with HMRC will be a much more agreeable one.

4: It Helps You Manage Your Cash Flow

Accurate Financial Reporting provides a clear picture of what's coming in and how you are spending (or not spending) it. Without timely Financial Reporting, you may find yourself facing an unexpected cash crunch that causes you to pay certain bills late and incur needless penalties. Financial Reporting enables you to know where your cash flow situation stands by telling you who has paid their invoices and who has not. This kind of information can be used to modify payment policies and restore order to your cash flow.

5: Accurate Financial Reporting Helps You Rest Easy

If you are perpetually unsure where you stand financially it is bound to affect your stress levels and overall quality of life. Knowing that your books are in order is a great feeling that frees you up to concentrate on other things, such as long-term planning. Having accurate financial information at your fingertips can help you strategise effectively and will go a long way toward ensuring that your long-term strategy pans out.

6: It's The Law

No doubt the biggest reason why Financial Reporting is important to any business is that it's the law. The Companies Act of 2006 requires all UK companies to maintain accurate accounting records. These accounting records must be sufficient to show and explain your company transactions, disclose with your company's financial position at any given time, and contain "entries from day to day of all sums of money received and expended by the company", along with how the money was either earned or spent.

Conclusion

In the long run, Financial Reporting will save you time, money, and a boatload of hassle. It will also help you plan effectively, avoid highs and lows with your business, weather unexpected downturns and sleep better.

For expert Financial Reporting recruitment you can rely on, give JMF Associates a call on +44 (0)20 8663 6699 or send an email to team@jmfassociates.co.uk.