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E-Myth – “Why most small businesses don’t work & what to do about it”

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Outsourced Accounting Services | What Notice To Reader Financial Statements Are?

Many accountants claimed that their clients don’t always have the financial numbers when they go see them, the numbers that they do bring are an accurate, or they don’t know how to read the statements says outsourced accounting services. This is often the case, because while business owners are extremely good at the product or service that their business sells, they often don’t have the prior business experience, and are less skilled at operating their business. As Warren Buffett once said, accounting is the language of business. Helping entrepreneurs speak that language of business can go a long way in making better financial decisions, and staying in business longer than they might have otherwise.

Business owner can understand what a notice to reader financial statement is, because it is the formal annual financial statements of the business. This is what the accountant will prepare for them in order to file their taxes. This includes three different reports that include in income statement, balance sheet, as well as a statement of returned earnings. This is the business owners snapshot of what happened in their business over the last entire fiscal year. This report should show them profit versus loss, the earnings in their corporation over time as well as the assets and liabilities in their business. This is extremely important for business owners to not only know about, but be able to read says outsourced accounting services. I understanding how to read this short, business owners can make better financial decisions in their business.

In the notice to reader financial statement, the chartered professional accountant will ensure that the balance sheets are balanced, the income statement is calculated correctly, and the numbers are plausible. This is the report that is most used by small businesses and private companies. The advantage of using the notice to reader statement, is that the accountant that is preparing the statement can be extremely involved with the business owner. They will be able to offer them advice, make suggestions on what they can change in their business, various marketing suggestions in order to help the business owner achieve their goals, and make great financial decisions. It’s also beneficial, because it is the least expensive financial statement that can be prepared.

Entrepreneurs should understand that there are limitations that come from these financial statements, and that the business owner must wait until the fiscal year end of their business in order to have them prepared by their chartered professional accountant says outsourced accounting services. And it will take about six months to prepare, so that by the time the business owner is looking at the financial statements in their business, some of the numbers can be up to 18 months old, which can be extremely difficult to plan around. Business owners often need more up-to-date numbers in order to make even better business decisions. By understanding that limitation of this report, business owners can focus next on investing on different accounting in their business that can help them on internal reporting in their business so they can see what’s going on in their business financially a lot sooner.

If business owners are not aware of what financial statements are, or how to read them or even use them in their business, they can end up making poor financial decisions says outsourced accounting services. Many accountants say that a lot of their clients don’t know how to read their financial statements, and as a result those financial statements are often in accurate. As Warren Buffett said, accounting is the language of business, and if business owners can understand some more accounting, then they can be better equipped to make better decisions in their business, which can help them grow and succeed.

There are three different types of financial statements that an accountant can prepare for a business owner and those are notice to reader financial statements, reviewed financial statements, and audited financial statements. Outsourced accounting services says that notice to reader financial statements are the most common statements required for entrepreneurs and small businesses. This is advantageous because it is also the most inexpensive report that can be created for businesses fiscal year end. The chartered professional accountant has a professional obligation to ensure the numbers are arithmetically correct and that the numbers are plausible. The accountant will do this by ensuring that the income statement is calculated correctly, and that the balance sheet balances.

Business owners should understand that while they aren’t required by law to get there notice to reader financial statements prepared by a chartered professional accountant, it’s often the best practice for them says outsourced accounting services. The reason is, if a non-accountant does the numbers, the business owner often does not have enough knowledge to check those numbers to ensure their accuracy. Which means the reports that are being created by professionals who are not accountants, are often incorrect, the business owner is never usually aware of it being wrong. This is a risk because if a business owner is planning their next fiscal year based on these numbers, and the numbers are wrong, they may be making bad business decisions and not even know it. Outsourced accounting services says that it’s definitely best practices for entrepreneurs to always get a chartered professional accountant to prepare the year-end financial statements for their business. It is not advised that entrepreneurs try to save a bit of money on these extremely important reports.

At Spurrell and Associates, there are some things that they do differently than most other accountants when completing notice to reader financial statements. They go above and beyond the requirements of plausibility to ensure that the reports they are providing to their clients are reliable. They will check against bank statements to see if members balance, review the A/R to see if it’s accurate, review the assets and liabilities to see if they make sense, they will import the ledger into the year-end software in order to check for mistakes. They do a significant amount of due diligence just to ensure that the notice to reader financial statement they provide the clients are extremely good.