m+a Accounting & Consultancy

How Accounting Firms Can Help With Financial Statements

There are a plethora of financial statements you have to complete and keep up-to-date regularly. And you need to do so regardless of your company’s size or industry. 

Financial statements serve as your company’s financial dashboard. They inform you of the direction and source of your funds, as well as the amount you have at your disposal. They are highly beneficial for you to make well-informed business decisions. If you want to secure funding or recruit investors, they are of utmost importance. 

Concerning that, accounting firms like Malkoun & Associates play a huge part in keeping your business’s financial transactions and statements in check. 

An Accounting Firm’s  Role in Financial Statements

To prepare financial statements and reports, accountants in Sydney use the information compiled by bookkeepers. This is a core role that differentiates them from other types of professionals who work in finance, such as investment bankers or traders. They also perform specialised functions depending on their qualifications. 

How Accounting Firms Prepare Your Annual Financial Statements

What is a financial statement? It summarises accounting information and presents it in an organised manner. This document gives an overview of how well your business is doing financially and what its future might look like.

When it comes to financial statement preparation by your accounting firm, the following are the key steps they’ll follow. Take note that the exact order may differ depending on the business and the accounting firm. 

• Step 1: Check the Supplier Invoices for Receipt

To confirm receipt of all supplier invoices, compare the receiving log to accounts payable. Add the cost of any unpaid invoices to your overall budget.

 

• Step 2: Check the Release of Customer Invoices

Verify that all client invoices have been issued by comparing the shipment log to the accounts receivable.

 

• Step 3: Collect Unpaid Payments

At the end of the reporting month, accrue an expenditure for wages that have been earned but have not yet been paid.

 

• Step 4: Compute the Depreciation Value

Make sure to account for all fixed assets in the accounting records by calculating depreciation and amortisation expenses.

 

• Step 5: Take Advantage of Inventory

To determine the final stock balance, perform a physical inventory count or use another approach. Calculate the cost of products sold using this data and input the value into your accounting records.

 

• Step 6: Bank Account Reconciliation

Perform a bank reconciliation and make all necessary modifications in journal entries to align the accounting records with the bank statement.

 

• Step 7: Update Balances in the Account

Post all balances from subsidiary ledgers to the main ledger.

 

• Step 8: Inspect the Accounts and Documents

Use journal entries to modify account balances to match the relevant data after reviewing the balance sheet accounts.

 

• Step 9: Check the Finances

Preliminary financial statements should be printed and reviewed for inaccuracies. There will probably be several mistakes; make journal entries to fix them, then reprint the income reports. Repeat the process until all errors are rectified. 

 

• Step 10: Accumulate Taxes on Income

Using the updated income statement as a guide, accrue an income tax expense.

 

• Step 11: Terminate the Accounts

For the current reporting period, close all subsidiary ledgers and reopen them for the next one.

 

• Step 12: Publicise Financial Statements

Print the complete financial statements. Create footnotes to go with the claims based on this data. Last but not the least, write a cover letter that highlights vital details from the financial statements. After that, put this information into packets and send them out to the regular recipients.

 

Choosing an Accounting Firm for Your Financial Statements

Finding the ideal accounting firm is how businesses manage their finances properly whilst staying competitive. By using these tips, you can simplify the process and have more time to prepare for more challenging aspects of choosing an accounting firm to manage your expenses. 

 

• Conduct Research

To avoid fraud, you should always do a thorough background check to confirm authenticity. Additionally, learn if other companies in your network utilise their accounting services and if they are satisfied. If you don’t have any worthy referrals, go online and check customer reviews based on where you are located. 

 

• Know What Your Company Needs

Before hiring an accountant, you have to analyse what your business needs. You need to understand the main reason for hiring one before deciding. The accounting industry is overwhelmed with accounting firms that specialise in various fields. Knowing what you need will make your search easier. 

It is advisable to work with a licensed accounting firm (CPA). However, you should also study the fundamentals of accounting and evaluate your company’s financial status and performance. 

 

• Make a Fee Comparison

How much does it cost to hire an accounting firm? Honestly speaking, a lot of factors, including your negotiating power, play a role in this. The accounting industry is saturated with unhappy customers and costly services.

However, before you discuss the reasons why CPA companies have higher fees, try to understand the job’s intricacies. The more complicated the job is, the higher the service fee will be. Also, the price often varies as per how you present the books to the accounting firms. 

 

How Malkoun and Associates Can Help You

If you’re looking for a qualified and experienced accounting firm to take care of your financial statements, Malkoun and Associates is here to help. We’ve been providing excellent services in the industry since 2008. We can provide you with peace of mind knowing your finances are in good hands.

In addition to providing outstanding customer service and value for money, we take pleasure in providing distinctive service lines. Clients appreciate our proactive approach and easy-to-understand advice.

For more details about our services, call us at (02) 8626 7562 today.