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As a developer or private equity firm, it is important to streamline your accounting and forecasting processes—particularly when there is complexity involved—in order to ensure the greatest amount of transparency across your company’s financials. This becomes more complicated (and important) when you have multiple LLCs, a complicated ownership structure, and poor communication with investors. Here are a few ways to ensure clarity in the face of complexity:
Consistent and transparent financial reporting
The purpose of financial reporting is to display an image of the company’s financial situation for both internal and external communication. This reporting allows a company to create a well-thought-out plan to improve management, marketing, finance, or corporate strategy activities.
Financial reporting also provides budget control, showing the expenses and income through a depiction of quantitative and qualitative data on the businesses evolution.
Also, financial reporting allows an organization to receive the necessary information to comply with the tax code in each country. Thus, financial reporting makes it easier to honor your civic duty of publishing your financials and paying taxes.
Lastly, financial reporting should be provided at the end of each month to ensure that your operating expenses are in alignment with your company’s target set in the annual budget, to be able to alter your business plan reflecting the reality of your business’s performance. Creating effective, concise financial reports is one of the many services offered to our clients at TGG Accounting.
Create a flow of internal and external information
The intention behind financial reporting is to inform accounting information to the company’s leadership internally. It collects data to notify the strategic decision-makers to assure the correct resource management is in use and discover any variation that they may alter their numbers, as well as any deviations shown by the budget.
If a company has shares in the stock market, financial reporting allows external agents, shareholders, and other parties to receive data dealing with the health of the company. It is crucial to keep these external parties informed of the internal practices and decisions of the company as a whole.
Automation
Automation saves companies from making manual adjustments, which bring about a lot of error margin, or problematic data load. Automating the compilation of accounting data and monthly reports will allow your financial reporting to steer clear of any transcription errors and accelerate the data collection process.
At TGG Accounting, our team of highly trained accounting and finance professionals incorporate accounting best practices to evaluate your current accounting system. We then develop a roadmap that starts with having the right numbers in place, handling everything from day-to-day accounting (account reconciliations, payments and collections, cash flow analysis, inventory management) to the production of financial statements, cash flow statements and balance sheets, among other services.
We then utilize the roadmap to put an infrastructure in place with automated systems, processes and internal control procedures that reduce the risk of fraud or theft. Our team will provide the systems necessary to create a cohesive, transparent strategy for your organization. Contact us to schedule for any of your outsourced accounting needs.
This post was reviewed by our team of accounting and financial experts. TGG’s mission is to make business owners’ lives better through excellent financial management. We strive to provide the most up-to-date and objective information on accounting-related topics so our readers can make informed decisions based on factual content. All posts undergo a review process with at least one member of our Leadership Team to ensure accuracy.
This post contains trusted sources. All references are hyperlinked at the end of the article to take readers directly to the source.
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Matt Garrett is the Founder and Chief Executive Officer of TGG. He is a regular speaker across the country on behalf of Vistage educating business owners on the need for sound financial practices, and is Vice President of the Board of Directors of FINACA. Under Matt’s leadership, TGG has received the following recognition: INC. 5000 top companies in the U.S. five years in a row; one of “San Diego’s Fastest Growing Companies” the past four years; and is among San Diego’s “Best Places to Work.”
