Confused about how to make a company financial report? Relax, in this article you will find complete information about tips for making financial reports easily. Financial statements are reports that represent the financial condition of a business in a certain period. Therefore, the existence of this report is very important for the company.
A person who understands accounting must be familiar with making monthly mileage report template. However, for those of you who are beginners and do not understand the field, this may be a challenge. Well, if you are appointed to make financial reports, there is no need to worry. Here are the steps on how to make financial reports easily.
Collecting and Recording Company Transactions
The first way to make a company’s financial statements is to record all company transactions in the current year in a journal. These transactions can include buying, selling, exchanging goods, renting, and so on.
You must also collect evidence of each of those transactions. Therefore, the proof of the transaction should not be lost. Proof of transaction is the basis for recording which can be in the form of receipts, notes, invoices, or others.
Collecting Data to Make Adjusting Journal
In making financial reports for service companies or whatever, sometimes there are things that are still not recorded or transactions occur at the end of the reporting stage, so it is necessary to collect data to make adjusting journals. This journal is made at the end of the period in order to adjust the estimated balance that will show the actual situation before the preparation of the financial statements.
In essence, the settlement journal can also be used to measure the company’s performance. With this journal, decision makers can calculate the best next step for the company.
Writing Financial Statements
The report that has been made in the work sheet earlier, you just need to write it neatly according to the provisions or financial reporting standards. This is because the work sheet has separated the amounts reported in the balance sheet or income statement.
Making Closing Journal
After preparing the financial statements, you also need to make closing entries. These are entries that are compiled at the end of the accounting period to zero all temporary accounts and transfer their balances to permanent accounts.
In other words, the temporary account is closed and reset at the end of the year. This activity is also known as closing the book. Temporary accounts are income statement accounts that are used to track accounting activities over a period of time. A permanent account is a balance sheet account to track activities that last longer than the accounting period.