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A financial report is one of the crucial elements for the continuity of a business. This report allows you to assess the state of a business or company because it provides information about the financial position of a company during a specific accounting period. It provides an overview of the financial health, performance and financial position of the company.
Therefore, it is important to prepare the financial report accurately. This discussion will cover how to create a good report, from how to prepare it to the challenges involved.
Initial preparation for creating a financial report
Before you create a report, you need to prepare a few things. Below you will find the first preparations you need to make before you create a financial report.
Determine the recording period
To create a proper financial report, you need to understand the accounting principles you will be using. This includes the accounting period that your company will use. Generally, the reporting period for this report will be annual, semi-annual or monthly.
Collect financial documents
To ensure proper record keeping, you should collect all necessary financial documents. This includes, for example, invoices, tax documents, payment receipts, bank statements and bank statements.
You can use these documents to record the details accurately and compile them in the report.
Prepare an accounting system and tools
To create an organized report, you should set up a proper financial accounting system. This system not only makes it easier to create the report, but also keeps track of all transactions.
In addition, you need to prepare appropriate accounting tools or software. A company's financial accounting involves large amounts of data, so it is difficult to rely solely on manual work.
Using accounting and financial management software will help you significantly in preparing a financial report.
Steps to create a financial report
After all the preparations are complete, you can start preparing the company's financial report. Below are the general steps that companies take when creating a financial report.
Ensure the completeness and accuracy of the data
To create a good financial report, you need to ensure that the data is complete and accurate. Communicate with all departments of the company to encourage the collection of financial data. This will be very helpful when preparing the report at the end of the accounting period.
Record income and expenses
The next step is to record the company's income and expenditure. This step is also known as bookkeeping. Bookkeeping is usually done in a general ledger or cash flow statement.
This step of recording should be done throughout the accounting period. To avoid missing or forgetting entries, it is best to record them as soon as cash inflows and outflows occur.
Bookkeeping plays an important role in the preparation of financial reports and overall financial management. Therefore, make sure that you record all details accurately, especially amounts and dates.
Adjust account balances
At the end of a particular accounting period, you must adjust the account balances. This usually includes bad debts, write-offs on assets and unpaid expenses.
This step aims to adjust the account balances to reflect the actual financial position. Adjustments are made because some transactions are not recorded in real-time.
Compile different types of financial reports
Once you have made the adjustments, you can compile the company's financial report. You can customize the types of reports to suit your needs. As a rule, you will need to create a balance sheet, a profit and loss account and a cash flow statement.
In addition to these types of reports, you can also add other necessary reports, especially if there is additional important information that is not included in the three reports.
Verification and audit
You can perform verifications and audits to ensure that the report is well prepared. Ensure that the report is accurate and reflects the actual financial position. You can perform both internal and external audits to verify the accuracy of the report.
Key factors in the preparation of a financial report
Several factors need to be considered when writing a good financial report. Below you will find important factors for the preparation of a financial report.
Reliability
As this is important data for the company, the financial report must contain accurate information. Make sure that the data you use comes from reliable and verified sources. The preparation of the report should also be based on accounting principles and be free from discrepancies or fraud.
Relevance
The financial report must contain information that is relevant to the needs of the company or stakeholders. This is because the report serves as a basis for decision-making processes. In addition, the report should contain accurate and up-to-date information.
Consistency
The financial report should be prepared using consistent accounting methods or systems. This consistency helps the company to read the report and compare it across different time periods. If there are changes to the financial report, these changes should be noted in the accompanying notes to the report.
Clarity
The information presented in the financial report must be clear, concise and easy to understand. This ensures that the company's stakeholders can easily read the content of the report.
Completeness
The financial report should contain complete and comprehensive information. This ensures that the report reflects the actual situation of the company. If the data is incomplete, the presentation of the report will be inaccurate.
Timeliness
As explained above, the financial report is prepared on the basis of a specific accounting period. Therefore, it is crucial for the company to prepare and finalize the report in a timely manner. Delays in the preparation of the report can hinder decision-making processes that need to take place within a certain timeframe.
Comparability
A good financial report should be comparable with reports from similar companies. Therefore, companies must apply the correct accounting principles when preparing financial reports. These principles serve as standards that make it easier for management to compare the company's performance with others.
Compliance
The financial report must be prepared in compliance with applicable rules, regulations and accounting standards. The team preparing the report must understand the accounting standards set by the relevant authorities.
Challenges in preparing financial reports and how to overcome them
Writing a financial report is not an easy task. There are many things, regulations and principles that companies need to consider in order to create a correct report.
Below you will find the most common challenges that companies face when preparing financial reports and how to overcome them.
Incomplete and inaccurate data
Data issues often become a challenge when preparing a company’s financial report. Incomplete and inaccurate data affects the credibility of the report.
To avoid this, you can perform regular reconciliations or account adjustments. Use accounting software that is integrated with the company's system to minimize errors.
Lack of communication and collaboration
The next challenge is the lack of communication and collaboration, both within the team and with other teams. This can lead to inconsistent and inaccurate data entry.
To address this, you should establish a clear process for capturing and reviewing financial data. You can also use integrated financial tools that facilitate team collaboration.
Time and resource constraints
Companies often face the challenge of time and resource constraints. Sometimes there are not enough teams or systems in place to help with reporting. Limited time also makes it difficult to create the report optimally.
To overcome this, you need to plan the tasks carefully. Using appropriate financial and accounting software is also helpful in preparing the report.
Simplify the creation of financial reports with Aspire
To simplify the creation of reports, you can use Aspire's all-in-one financial solutions as you can integrate your financial data directly with the accounting software you use.
Through this integration, all financial transactions are automatically recorded in the accounting software. In this way, the data is recorded more accurately, making it easier to create reports later on.
In addition, Aspire helps you manage company finances on a single platform — from managing receivables and payables, claims and reimbursements to collecting payments.
You can also issue corporate cards for your employees to use when needed. Expenses and payments made with these cards are automatically recorded, making it easier for you to control and manage the company's cash flow.
Want to find out more about how Aspire can help you manage your business finances? Contact our professional team now!
Frequently Asked Questions
How can Aspire support the unique financial needs and challenges of mid-sized businesses?
Aspire offers a comprehensive suite of expense management solutions tailored for mid-market companies. This includes sophisticated corporate cards, advanced budget controls, and streamlined claims and approval policies, all designed to enhance financial efficiency.
How quickly can a mid-market company integrate Aspire's solutions into existing systems and workflows?
Integration with Aspire's expense management solutions is swift and seamless. Mid-market companies can swiftly implement corporate cards with tailored features, set up nuanced budgets, and establish streamlined claims and approval processes, ensuring minimal disruption to existing workflows.
How does Aspire compare to competitors for international money transfers?
Aspire excels in international expense management with FX fees up to 2x cheaper than traditional banks.
Global payments are offered by various providers through business accounts. Read our article to know more about types of business accounts and how to choose the best one for your business. There are many banks and fintech companies offering business accounts to businesses in Singapore. We have covered them all in our blog, you can click the links to view accounts offered by various banks such as DBS, OCBC, Maybank etc.
However, if you are a start-up or a growing business, chances are you may not meet the eligibility criteria for most of these banks or find their charges to be expensive for your liking. You can consider opting for Aspire multi-currency account for global payments which offers you all the benefits, with eligibility criteria which are less stringent. Read our article on bank charges in Singapore for a quick and easy comparison.
What level of customization does Aspire offer to meet the specific financial requirements of mid-market clients?
Aspire understands the diverse financial needs of mid-market clients and provides a high level of customization to tailor solutions accordingly. This includes the ability to customize corporate cards with specific spending limits, rewards, and benefits that align with the unique requirements of each client.
Additionally, Aspire's budgeting features are adaptable to accommodate the distinct financial structures of mid-market enterprises. The platform also allows for fine-tuning approval policies, ensuring they align with the specific workflows and compliance standards of individual mid-market businesses. This commitment to customization empowers mid-market clients to optimize their expense management in a way that best suits their financial goals and operational preferences.
Is there a minimum balance required for Aspire Business Accounts?
No minimum balance is required to keep your SGD, USD, EUR, GBP and IDR Accounts activated.
Can Aspire's corporate cards be customized to cater to the specific needs of consulting teams on the go?
Yes, Aspire's corporate cards are highly customizable. Consulting teams can benefit from tailored spending limits, travel-centric perks, and real-time transaction tracking, ensuring that the cards meet the unique requirements of professionals on the move.
How does Aspire support budget management for consulting projects and travel expenses?
Aspire's platform offers sophisticated budget controls that consulting companies can adapt to project-specific needs. This includes setting project budgets, tracking expenditures, and receiving real-time insights to ensure that expenses align with project goals.
What are Aspire Corporate Card FX rates?
At Aspire, we want you to pay the lowest rates in the market.
- Zero card activation fees
- Zero card transaction fees
- Best FX rates, up to 2x cheaper than banks
How does Aspire help consulting companies enforce expense policies and approvals for travel expenses?
Aspire streamlines the claims and approval process, allowing consulting companies to establish and enforce expense policies seamlessly. Customizable approval workflows ensure compliance with company policies and industry regulations.
Is Aspire's platform scalable for consulting companies of varying sizes?
Yes, Aspire's platform is scalable and caters to consulting companies of all sizes. Whether you're a boutique consultancy or a larger firm, the platform's features can be adapted to meet your specific travel and expense management needs.
How can I open a business account in Singapore?
For a business account in Singapore, Aspire is an excellent choice. With a focus on startup and SME needs, Aspire offers a seamless and transparent banking experience.
Benefit from their user-friendly online platform, no minimum balance or account opening fees, and dedicated support for businesses of all sizes.
Aspire is designed to streamline your financial management, making it an ideal partner for entrepreneurs in Singapore.
How long does it take to open an Aspire business account?
Registration with Aspire takes less than 10 minutes which you can do via our website or mobile app.
Once registered, we will get back to you within 5 business days on whether your account has been activated or if we need further documents from you.
Our account verification process varies according to the nature of your business. In exceptional cases, it can take up to 7 days to process your documents.
How can Aspire's corporate cards benefit my startup?
Aspire's corporate cards offer a range of benefits for your startup. Earn 1% unlimited cashback on qualified spends, simplify expense management, enjoy streamlined transactions, and gain real-time insights into spending. With customizable limits, integration with accounting software, and enhanced security features, Aspire's corporate cards are designed to empower your startup's financial efficiency and provide added convenience for your team.
Is Aspire suitable for both early-stage and established startups?
Absolutely, Aspire caters to the needs of both early-stage and established startups. Whether you're just beginning your entrepreneurial journey or have an established business, Aspire offers tailored financial solutions to help streamline your operations.
From managing expenses and optimizing workflows to providing valuable financial insights, Aspire's platform is designed to adapt and scale with your business as it grows. The flexibility and scalability of Aspire make it a suitable choice for startups at various stages of development.
Is there a minimum balance required for Aspire Business Accounts?
No minimum balance is required to keep your SGD, USD and IDR* Accounts activated.
However, we recommend keeping your subscription plan amount available on your balance to ensure you're up to date with your payment every month.*
To create a recipient or make any transaction on your IDR Account, you'll need to have a minimum balance of IDR 10,000 on your account.
