Financial Reporting – Page 2

Fraud Types and Financial Transparency’s Reduction of Them

Is your nonprofit at risk? Do you know if fraudulent activity is taking place within your organization? None of us want to become a statistic, but with the rampant and varied means by which fraud occurs, it can be easier than you realize to be susceptible to fraud. In today’s society, fraud is like a mask that covers up the truth and takes on many different forms and identities which makes it harder to identify and eliminate. No matter what, fraud is a destruction of trust, and it is so important to be aware of what is truly going on within your organization in order to prevent it. Because nonprofits are considered trustworthy by nature of the public good they intend to do, the damage in violating trust is even more severe for not-for-profit organizations.

Reducing Fraud’s Risk:

We all know and understand that abusing trust can be costly for nonprofits. Ultimately, it could be more than just costly for fraudulent activities to take place at an organization. It can actually completely destroy and terminate organizations that are not careful and vigilant in protecting their organization and doing all of the necessary steps to prevent fraud. Fraud can be prevented by using internal controls and internal audits in order to be detecting it quickly. It can also be stopped by educating the organization’s staff on the forms of fraud and actions that would constitute it in addition to its impact and how to report it if it is being noticed. Finally, fraud can be prevented through the board of director’s vigilance, policies, and financial supervision. To learn more about these three ways to prevent fraud, visit here.

Beck and Company’s Certified Public Accountants and Business Advisors offer auditing services that can provide you with an extensive examination of financial statements to give you a closer look at possible areas of fraud within your organization through a nonprofit financial audit so that you can be intentional in establishing and maintaining trust in those areas instead of harming it. These nonprofit financial audits are truly essential to maintaining the organization’s health, but they are not the sole means through which fraudulent activity can be discovered. Ongoing effective financial reporting and the use of these reports to continuously be sharing this information with constituents and board members to ensure financial transparency is essential.

The Types of Fraud and How Financial Transparency can Help:

Let’s take a closer look at the forms and faces fraud can take and how to unmask these fraudulent activities and prevent them with financial transparency and effective financial reporting. Nonprofit organizational fraud can take the form of:

Payroll or billing schemes
Check tampering
Unrecorded or understated funds
Mischaracterized or fictitious expenses
Undisclosed conflict of interest transactions
And many other forms as well

Clearly, many of the types of fraud stem directly to finances and financial practices within a nonprofit organization. Both intentional errors in use of funds and intentional errors in recording funds lead to fraud and trouble for nonprofits. Falsifying funds and financial records is so costly and damaging to organizations that it is important to be consistent, vigilant, responsible, and in tune to financial actions and transactions on an ongoing basis in order to uphold financial transparency. Effective financial reporting is key, and active involvement in financial dealings is essential to knowing what is going on within the financial side of the organization to prevent dishonest activities from having a chance to even occur let alone expand.

Beck and Company CPAs are passionate about helping nonprofits get their financial reporting in order so they reduce the risk of fraud. Learn more about all of the nonprofit services we offer in addition to the auditing services mentioned earlier. Contact us to let us know how we can help your organization with the financial services, internal audits, and other services to keep your finances in check and your organization “unmasked” to prevent fraud.

Cloud Computing: Improving Financial Reporting and Strengthening Security

As we’ve looked at solutions for increasing effectiveness in financial reporting over the past couple weeks, one solution we’ve explored is Cloud computing. We learned that it is an effective way to have financial reports be accessible anywhere at any time and is a trend that is set to become even more widely used in 2015. But, you may be left wondering if the Cloud truly is a solution that can help in strengthening security instead of compromising it. Financial records are so important that your data security should not be taken lightly. Beck and Company Certified Public Accountants and Business Advisors know that there is too much at stake to not be putting your organization’s safety as the number one priority. Without safeguarded data and accurate records, you could be in serious trouble. If your data is stored in the Cloud, will it truly be safe? Let’s take a closer look.

What are Cloud backup services?

These are becoming more and more popular throughout the world because they are both cost effective and flexible. Storing your information and data in the Cloud not only protects it from disasters of all kinds, but it also does not require additional resources such as hardware or software. Because content is transferred automatically, it ensures data is protected from threats that are either physical, digital, or environmental. Recovery time, in case of an emergency, will be reduced substantially because of this. This gives all constituents the peace of mind they need to know that information is safe and recovery will be quick and easy if something happens.

This backup protection is even more important because so much of the data you have is financial information. Your financial reporting and accounting records, when used through the Cloud, are protected as well. This information is just too precious to risk losing, but the Cloud allows for this protection.

For the sake of clarification, there are other backup services available besides on the Cloud, but they are not as comprehensive. Local backups are one example. This means storing data on a hard drive, CD, or flash drive. Unfortunately, lost or broken data storage tools present a problem, and the backup needs to be done at least weekly and done manually to be sure nothing is lost. Offsite data storage is another example. They may offer more protection from physical dangers (natural disasters, theft, etc.), but they require more planning and resources. They require numerous and portable media, a secure location offsite to store the media, and a plan to be sure data is being regularly backed up and transported to the location.

Beck and Company CPAs offer technology consulting services and would be happy to help you understand the Cloud more. We can help you with your technology needs so you can ensure you have easy access to all of the financial reporting capabilities your business needs while strengthening security of the information instead of compromising it. Find out more about our technology consulting services here.

Is the Cloud Safe?

While the first impression of the Cloud may be a good one, businesses still question whether the Cloud really is a safe solution in which to store their business-critical data and accounting information. Like many new technologies, the Cloud has come under serious scrutiny. How, then, can a data backup solution that is maintained online be safe?

First of all, the Cloud has strong data encryption to prevent hackers (and even your backup service provider) from unlocking your data and violating your client confidentiality. The encryption technology is so advanced, in fact, that it offers complete confidentiality of all of your data stored in the Cloud. Make sure that your data is encrypted prior to (and during) transmission and that it remains encrypted while it is stored in the Cloud for safekeeping.

Your online data archive will also be fully protected with a digital encryption key. In order to keep your data locked up tight, make sure your provider allows you (or a designated person in your office) to be the only one with access to the encryption key.

Contact us here at Beck and Company CPAs to find out more about the best ways you can accurately record financial information whether through a Cloud computing solution or by partnering with one of our accountants to help you get your business finances in order.

Financial Reporting Made Easy and Accurate with the Cloud- 2015 Trends

Last week, we took a look at a cure for financial reporting management mistakes. This week, we’ll take a look at another way to help your financial reporting to be more efficient and on track with the times. This is through Cloud computing.

Our fast-paced world means it is likely you don’t spend every minute in your office and are more reliant than ever on mobile technology. No matter where you are, you likely have times when you have a need to instantly access company information about finances and financial reports. Technological advancements have meant that it is now possible to send emails, check account balances, and view reports anywhere, any time, and on virtually any device. With a mobile framework quickly becoming the norm, there is also an increasing need to have instant access to accounting information and other vital statistics at any time. All of this is achieved through The Cloud. Cloud computing allows businesses to have this flexibility of instant access of data from any device for any constituent that is needed today.

Do ever fear that information stored on the Cloud is less accurate than that of the data stored on-premise? Well, you have no need to fear. The same data that is used for financial reporting at the office is simply saved to the Cloud so the information you access on the go is just as accurate. Essentially, it is the exact same data in a mobile format.

With the trend being that more and more organizations will transition to the Cloud in 2015 and that the Cloud offers many capabilities beyond what an on-premise solution can, the time is now to consider it. Beck and Company’s Certified Public Accountants and Business Advisors offer your business a variety of technology consulting services if you would like more personalized information about the Cloud and its application to meeting your company’s needs. Find out more about our technology consulting services here.

What, exactly, are the trends in Cloud computing as we finish out 2014 and look toward 2015? These will help you see that Cloud computing is likely to not be just a technology trend of the time but one that transforms the business world. In fact, it has the staying power and potential to forever change the way we do things. Through automation of manual processes, streamlining of tasks, and instant access to your company’s information and data, the Cloud has made nearly anything possible.

What does Cloud Computing’s Future Look Like for 2015?

1. More companies will transition to the Cloud in 2015 than ever before

For some companies, this will mean simply deciding if they will transition to the Cloud while others will move their Cloud solution to the hybrid Cloud that offers the security of a private Cloud with the scalability of the public Cloud.

2. Disaster recovery services will transition fully to the Cloud

No longer will companies use Cloud services as a simple backup. With continued reliability of the Cloud being proven, many organizations will chose to move everything to the Cloud in terms of disaster recovery service.

3. Those currently using the public Cloud will transition over to the private Cloud

Security concerns and control issues are contributing to this transition already.

4. Apps that are powered by the web are likely to become top tools for companies

The unmatched efficiency and scalability of mobile apps means they will become even more prominent.

Contact us here at Beck and Company CPAs so we can help you start off on the right foot in 2015 by transitioning your financial reporting to a Cloud-based operation through our technology consulting services. Stay tuned next week as we look at if the Cloud is truly a safe and secure solution for storing your important financial information and reports.

The Cure for Unhealthy Financial Reporting

Are you feeling like your financial management is ineffective and inaccurate? Do you need a CURE for “unhealthy” financial reporting practices and records? Look no further. We have just the financial management treatment you need to nurse your financial records and reports back to health. And, there is no better time to do this than now as you finish up the year 2014 and look to the new year of 2015. Having your financial reports in order now will help you with upcoming budgetary and company decisions that you will be making and will keep you on track to get a clean bill of health throughout all of 2015. This will also set you up for success in being prepared with reports at a moment’s notice upon request. Who doesn’t want to be healthy in the New Year?! We all do. Your business needs to be in a healthy place, too, and financial reports that are accurate and organized are vital lifelines in this health and are important tools and resources for constituents of your company or organization.

If you are in need of personalized help and attention in the area of financial reporting, Beck and Company’s Certified Public Accountants and Business Advisors are trained professionals who can help you reduce costs through business process optimization. This involves improving workflows and operational efficiencies that can ultimately have a positive impact on your bottom line. Learn more about our client accounting services here.

In addition to the personalized accounting services we offer, here are some general tips for what characterizes good and healthy financial reports and statements. As a general rule of thumb, keep in mind that the information contained within the reports should have the needs of the users of the reports in mind. Consider the audience when creating reports so the needed information is included and information that is not pertinent is not included. Not all audiences are created equal so not all reports should be created equal. Regardless, though, the reports must be correct, and more detailed information must be available upon request when more concise reports are shared. Just think of C.U.R.E., and you’ve got the cure you need when it comes to healthy financial reports!

C- Comparability

The information must be comparable to the financial information presented for other accounting periods so that users can identify trends in the performance and financial position of the reporting entity.

U- Understandability

The financial information must be readily understandable to users of the financial statements. This means that information must be clearly presented with additional supporting information supplied as needed to assist in clarification.

R- Relevance

The information must be relevant to the needs of the users, which is the case when the information influences the economic decisions of users. This may involve reporting particularly relevant information or information whose omission or misstatement could influence the economic decisions of users.

E- Error-free

The information must be reliable and therefore free of material error and bias while also not being misleading. Thus, the information should faithfully represent transactions and other events, reflect the underlying substance of events, and prudently represent estimates and uncertainties through proper disclosure.

In addition to the CURE above, there are many other characteristics of effective financial reports. These include showing context and keeping investors in mind, being compliant with rules and regulations, following the Disclosure Management Cycle, creating the reports in collaboration with others within a business team, etc. You can learn more here. Please contact us to learn more about how we can help you and your business to succeed in all areas including in the financial realm with your financial reporting practices and efficiency. Stay tuned next week for another cure to the financial record mismanagement blues!

Tips for Cleaning Up Accounting Records

With all that goes into smoothly running a business, it is likely that some tasks will end up getting less attention than others. Don’t let your accounting records be one of those areas. Instead, make sure that they are a priority and are updated regularly. Whether you manage all finances in house or need outside help from an accountant, having your records in order is still essential. Without proper records or records that are disorganized, it will be difficult for you or your accountant to properly track and record financial information. If you are looking for accountant assistance for your business, Beck and Company’s Certified Public Accountants and Business Advisors are here to help you with these needs. We provide many accounting services.

It may be that you feel financially illiterate and have no idea where to even begin with organizing accounting records. It could also be the case that you have not had the discipline nor the systems in place as a company to keep records cleaned up. Regardless, you likely are aware that having these records organized and efficiently laid out would be immensely helpful in so many ways. With a fast-paced business world and so much at stake, there is no need to spend valuable time sorting through messy records time and time again. Instead, creating a system for a month-end accounting process clean-up will allow you to make informed decisions with ease and quickness while also helping you to focus more time on the future of the business instead of on financials alone.

How can your records be cleaned up so financial reporting is both possible to do and accurate, too? Below are some tips to do just that on a monthly basis. This checklist will help when evaluating the performance of your own accounting support and will make outside help from an accountant easier thanks to records that are ready to use and organized.

Do retained earnings agree with my tax return? If not, do I understand exactly why it’s different? You don’t have a good starting point if this isn’t right.
Cash accounts are reconciled and agree with bank statements. Items that are not reconciled are investigated.
Fixed assets are appropriately capitalized. This means that you look at accounts in your profit and loss for lease payments and other purchases that should be capitalized.
Other assets are appropriately stated. If you have an asset account that hasn’t changed, look into whether or not it’s still realistic.
Credit cards are reconciled.
Unrelated party loans (e.g. lines of credit, bank loans) agree to statements, and interest is booked appropriately.
Related party loans (e.g. inter-company) agree on both sets of accounting records (if you own more than one company and loan money back and forth).
If your balance sheet is accurate (steps 1 – 7), review your profit and loss statement. Are expenses within tolerable thresholds relative to prior years and periods?

If you do all of this, you know you have good data, and you can make decisions based on accurate information or have an accountant help you with this. It also ensures that, when asked, you can produce financials at a moment’s notice to interested parties. Beck and Company CPAs can help you in this process of preparing accounting records for accurate financial reporting so you are ready when the need arises for these records. Please contact us to learn more about how we can help you and your business to succeed in all areas including in the financial realm.

Effective Financial Reporting and other Keys to Preventing Fraud

It seems to be a common occurrence to hear about fraudulent activities occurring throughout the business world in the news. Unfortunately, even nonprofit organizations fall victim to fraudulent activity and commit fraud in a variety of ways. Within nonprofits, much of this activity stems from dishonest or improper financial reporting. It can take the form of payroll or billing schemes, undocumented funds, fabricated or invented expenses, and more. When it comes down to it, fraud is a violation of trust. It is essential to be vigilant in preventing fraud within your organization to maintain the trust the public has in nonprofits and to keep the trust throughout the organization. Your organization’s financial transparency can help prevent fraud.

Here are three tips for preventing fraud in your organization:

1. Use internal controls and financial audits to detect fraud. It is easy for nonprofits to rely on external audits to provide recommendations and evaluate internal controls while also identifying fraud risk. Beck & Company’s Certified Public Accountants and Business Advisors offer auditing services that can provide you with an extensive examination of financial statements to give you a closer look at possible areas of fraud. These nonprofit financial audits are truly essential to maintaining the organization’s health, but they are not the sole means through which fraudulent activity can be discovered. There is no substitute for strong internal controls to both reduce the opportunity for fraud and to detect fraud more quickly if it occurs.

2. Educate your staff about fraud through training. Staff members should be trained and educated on what actions constitute fraud, how fraud can harm the organization and its mission, and how to report questionable activity. This training has minimal cost and is highly effective.

For starters, educate employees on the three common forms of fraud:

Asset misappropriation– an employee steals or misuses the organization’s resources. Examples include, but are not limited to, theft of cash or checks, false billing, vendor fraud, and inflated expense reports.
Corruption schemes– an employee, for their personal benefit, misuses their influence in a business transaction in a way that violates their duty to the employer such as through bribery and conflict of interest transactions.
Financial statement fraud– an employee intentionally causes a misstatement or omission of material information in the organization’s financial reports. Recording fictitious revenue, understating expenses, and reporting artificially inflated asset values are all part of this. Effective financial reporting is essential to your organization’s reputation. Visit here to find out more about how to ensure proper reporting and internal controls are in place at your nonprofit.

3. Remember that the board plays a role as well. Don’t overlook the board. The board of directors is still responsible to help monitor and supervise finances and operation even if they are not present on a daily basis. They have an important say in financial control procedures and policies. They also have a responsibility to act if fraud is detected by investigating, creating action steps, and reporting the incident. Board members are responsible for acting with due care and putting the best interests of the organization first. In some cases, board members have been held liable when it was determined they were negligent in fulfilling their fiduciary duties of care, loyalty, and obedience.

Understanding More about the Threat of Fraud:

Both damaged trust and damaged finances can result from fraud and therefore cause a substantial issue for nonprofits. What is even more striking is that, generally speaking, most organizations that fall victim to fraud do not recover any of their losses. Where does this fraud come from in the first place? Employees of varying ages that receive varying salaries are all susceptible. However, fraud committed by managers or executives takes twice as long to detect as compared to non-management employees. It is important to be on the lookout for fraud at all levels and assume no one is exempt.

Beck and Company CPAs are passionate about helping nonprofits get their financial reporting in order so they reduce the risk of fraud. Please contact us by calling 703-834-0776 x8001 to learn more about all of the nonprofit services we offer.

Nonprofit Accounting: The Elements of an Effective Financial Report

As we discussed last week, nonprofit organizations are required to present financial information to their board on a regular basis (usually monthly). Clear and effective financial reporting to the board of directors is necessary for good financial management and accountability; however, many organizations do not understand the elements that make up an effective financial report. The information within your financial reports should be relevant, understandable, reliable, and useful. If your reports are not these things, it’s time to sit down and revisit your nonprofit’s financial reporting methods.

Take a closer look at the four characteristics of effective financial reports and see for yourself if your reports are making the cut:

The information contained in your financial reports must be relevant.
The finance committee and board of directors will determine what information is needed to monitor the organization’s financial progress. Your reports should include the financial position of your organization (assets and liabilities), key statistical data to help board members determine the financial outlook of the organization, and a summary of operations (revenue received and expenses incurred). At a minimum, your financial reports should contain the following:
- Salary and benefits expenses
- Food costs (if substantial)
- Revenue from grants, fees, etc.
- Month-end summary of significant assets, including accounts receivable, accounts payable, grants not yet paid out, and cash

It would also be useful to present a comparison of your actuals versus the budgeted results. These comparisons aid the board in determining whether or not financial policies are being followed and if action needs to be taken. This analysis is most useful when provided with detailed notes explaining any significant variances.

The board must understand the information being presented in the report.
Your financial reports need to be easily read by all of your board members, so make sure they are understandable. Remember, the members of your board have varying levels of financial experience so don’t inundate them with unnecessary information. Find out what they prefer and deliver it. Some boards want a detailed account while others prefer a one page summary. Determine your strategy for creating the reports your board wants and stick with it.
The financial information must be reliable and accurate.
Financial reports are only useful if they are reliable. Double check your data to ensure its accuracy and reconcile your bank statements to your accounting records on a monthly basis.
The information contained in your reports must be timely.
Delivering effective financial reports is all about the timing. Reporting the results of your operations and financial position in a timely manner is crucial if the board wishes to take corrective action.

Overall, creating effective financial reports for your board is not difficult. It just takes a lot of time and attention to detail. By properly maintaining your accounting records throughout the month, you can ensure that the information in your reports is reliable and accurate. Contact us today if you need help maintaining or cleaning up your accounting records. We offer a variety of accounting services designed to help you succeed in your financial reporting efforts.

Why Financial Transparency is Important to Your Business

Recent financial scandals among businesses and corporations have led to extreme distrust in America’s businesses. Today’s consumers are more hesitant to contribute to the financial success of businesses they feel of unethical and dishonest. In an effort to increase financial transparency among businesses, the government has implemented several new laws and financial reporting regulations. While these changes may seem like an inconvenience, they are actually beneficial to the long-term success of your business.

Financial transparency can help your business build and maintain trust with its customers and financial partners. When a customer knows that you are spending your money ethically and responsibly, they are more inclined to support your business through the purchase of your products and services. While it may seem instinctive for companies (particularly private companies) to keep sensitive financial data such as employment numbers and growth plans away from the public, sharing information about your financial performance is actually to your advantage.

When you are forthcoming about your business’ financial performance to your business partners, you minimize the risk of having your business as a partner. Having fewer unknowns can also increase your success when it comes to supplier relationships. By sharing your financial information with your suppliers, you might be able to delay payments to vendors by 30 days instead of having to pay in cash upon delivery. When your suppliers see that you can be trusted with a line of credit, they will be more flexible when it comes to payment.

Some companies have even seen an improvement in their bottom line increase after adopting internal financial transparency policies. Sharing financial information with your employees may be uncomfortable at first, but many companies are saving money because of it. When your employees see how their actions impact the company’s bottom line, they have an incentive to make changes and stick to their department budgets. By increasing your financial transparency internally, you are giving your employees the tools they need to stay on track and keep your business profitable.

If your business is interested in building the trust of its suppliers, partners, and customers, consider being a little more transparent with your company’s financial information. When your partners and customers see that your company is financially stable, their confidence in your brand will increase. Read our blog for more tips on increasing your business’ financial transparency through effective financial reporting.

Do you need help becoming financially transparent? Are you looking for an accountant to help you better manage your company’s finances? Beck & Company’s CPAs are available to assist your company with all of your financial matters – from helping you create more effective financial reports to assisting you with your tax returns. Give us a call today!

Keys to Effective Financial Reporting: Setting Internal Controls

Since the passing of the Sarbanes-Oxley Act of 2002, businesses and corporations have had to reevaluate their financial reporting processes and procedures to comply with more restrictive federal laws. In an effort to protect businesses and organizations against costly errors and fraud, the government is cracking down on financial reporting and the storage of electronic financial documents. Business accounting software can only get you so far. While the software is certainly helpful in tracking and auditing your financial transactions, you need to develop sound internal controls to establish the required “separation of duties” (or “checks and balances system”). Financial responsibilities should be separated within a business or organization, and there should be policies implemented that discourage one person to have complete custody over the financial decision-making and review process.

Setting internal controls ensures compliance with Sarbanes-Oxley and protects the financial integrity of your company or organization. Below are several tips designed to help you set effective internal controls and increase the effectiveness of your financial reporting:

Do not let the person (or persons) managing your company’s bookkeeping functions handle cash.
Reconcile bank statements on a monthly (30-day) basis. Make sure this is done by someone who is not responsible for bookkeeping, cashiering, or depositing. When complete, these bank reconciliations should be reviewed by supervisors for accuracy and completeness. Make sure both the reviewer and preparer signs off on each monthly reconciliation so you can track who reviewed it.
Do not allow employees who handle cash have access to accounting records.
Reconcile all receipts with deposits made into the company account to verify that all collections are accounted for in the system (and bank). This task should be performed by someone who is not responsible for making the purchases or deposits.
All cash disbursements need to be approved by an employee who is not involved in the check preparation, bookkeeping or bank reconciliation process.
Checks need to be written and/or printed by someone who is not responsible for disbursement approvals, check distribution, or maintaining the company’s accounts payable ledger.
As soon as checks or cash is received, a receipt of payment needs to be prepared; all checks need to be endorsed immediately upon receipt.
The frequency of the deposits into your company or organization’s bank account should be determined by the volume of funds you receive. If your receipts total more than $500 (or a reasonable amount for your organization), they should to be deposited within a day. For amounts under the threshold, the funds can be properly secured in your office for a week or until the amount reaches the threshold.
Require two signatures on all checks for cash disbursements, and make sure at least one of the signers is not responsible for any cash receipt or disbursement functions.
Mark all paid documents (invoices, receipts, purchase orders, etc.) “PAID”, and write the check number and payment date on each document. This will ensure integrity and help you track when you paid what outside of your accounting system.

Setting internal controls is important to your company’s reputation. It can help ensure financial integrity, as well as help you create more effective (and accurate) financial reports. Stay tuned to our blog for more effective financial reporting tips.

Do you need help setting internal controls? Are you looking for ways to improve your accounting processes? Learn more about our accounting services – we’d love to help you get on the right track!

Top 5 Characteristics of Effective Financial Reports

As we have discussed in past articles, effective financial reporting can increase your small business’ efficiency and transparency, as well as help you make better business decisions. In order to create effective financial reports, however, you need to have a basic understanding of what makes a financial report effective in the first place.

Effective financial reports are not basic charts reflecting a company’s financial status or sheets of paper with facts and figures. Effective reports show trends and answer questions rather than simply providing raw data to be sifted through at a later time. They provide insight into a company’s unique financial situation and help solve problems before they even begin.

Effective financial reporting is crucial if you wish to grow your business. Without effective reports, your company will remain stagnant and your questions will remain unanswered. Take a look at the following characteristics that make up effective financial reporting:

Effective financial reports show context and keep investors in mind.
Effective financial reports begin with the end in mind, or rather, the investors in mind. Your financial reports should provide your investors (or potential investors) with context. This can be achieved through written anecdotes, honest disclosures, and compliance with accounting standards, regulations, and rules.
Effective financial reports are a result of automated processes.
Even if your financial accounting system has automatic controls built-in, do not assume that these are turned on or configured properly. Automated controls are often overridden or bypassed, so you need to ensure that your financial reporting team has access to the tools they need to make reporting efficient and compliant.
Effective financial reports are compliant reports.
Compliance is a must when you are dealing with financial reporting for businesses. If you are not aware of the rules and regulations, you need to brush up on these ASAP. By maintaining compliance, you will avoid filing errors and labor costs. Effective financial reporting requires the use of software that is able to deliver important information accurately and, ultimately, provide a large return on investment (ROI).
Effective financial reports follow the Disclosure Management Cycle.
The Disclosure Management Cycle outlines the life-cycle of a financial report. The cycle includes:
- Setting internal controls
- Applying reporting procedures
- Benchmarking best practices
- Receiving regulatory input
- Submitting to industry regulations
- Distribution to the public
- Review of the report
- Suggestions for improvement
Effective financial reports are created through company collaboration.
In order to create more effective financial reports, you need to have collaboration among your business team. Encourage dialogue between your financial reporting team and other department managers. Streamline communication throughout your business and implement more robust systems to create a seamless exchange of information across departments. This will ensure that your financial reports are not missing any crucial information.

Your financial reports can open up a new realm of business opportunities. By improving your financial reporting process and creating more effective financial reports, you are increasing your efficiency and transparency. For more effective financial reporting tips, stay tuned to our blog. We will be highlighting key tips and tricks to help businesses like you accomplish your financial goals.