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Why are Accurate Financial Statements important?

To illustrate the recording down of financial statements

To illustrate the recording down of financial statements

Business owners needs the availability of accurate financial statements to make improved business decisions. The significance of financial statements cannot be overlooked, as they are imperative for any organisation.

Some of the most important financial statements include: Income Statement, Balance Sheet, Statement of Stockholders’ Equity, Cash Flow Statement and Profit and Loss Account.

The numbers revealed through these financial statements play a crucial role in allowing users to make informed decisions, plan strategies, estimate failures and determine success.

 

Objectives of Financial Statements

1) Provide information to Management of Organisation

This is for the purpose of planning, analysis, benchmarking and decision making.

2) Provide information to Investors, Promoters, Debt Providers and Creditors

This is to enable them to make rational and prudent decisions regarding investment, credit etc.

3) Provide information to Shareholders

This is to keep business owners notified about activities and various aspects of an organisation.

4) Provide information on Liabilities and Owner’s Equity

This is to let business owners know how these resources and claims have undergone change over a period of time.

5) Provide information to Stakeholders regarding Management Performance

This is to inform on how ethically and diligently the management is discharging their fiduciary duties and responsibilities.

6) Provide information to Statutory Auditors

This is to provide auditors the necessary information to perform audits.

7) Enhance Social Welfare

This is through looking into the interest of employees, trade union and government.

 

Importance of Financial Statements

1) Financial statements form the backbone for financial planning, analysis, bench marking and decision making. These are used for above purposes by stakeholders.

2) Helps organisations to raise capital both domestic and overseas.

3) Allows the analysis of performance of the organisation as well as management.

4) For the purpose of bidding, labour contracts. Organisations are required to furnish their financial reports.

5) Facilitates statutory audit. This allows auditors to express their opinion and make suggestions.

 

Million Software and Financial Statements

Million Software recognises the importance and objectives of providing detailed financial statements. Little to no accounting knowledge is needed to craft out accurate reports.

Million Software includes Million Accounting, Million Invoicing, Million Stock Control and Million Payroll. Each provides various different financial statements, which means Million provides a huge variety of information to business users.

Below are the examples of financial reports Million Software produces:

Accounting Invoicing Stock Control Payroll
General Ledger Listing Print Quotation/ Sales Order/ Delivery Order/ Invoice Print Quotation/ Sales Order/ Delivery Order/ Invoice Print CPF Form 91/ IR8A
Trial Balance Print Cash Sale/ Credit Note/ Debit Note Print Cash Sale/ Credit Note/ Debit Note Print Payslip
Profit & Loss Monthly Sales Analysis Stock Card Print Basic Pay/ Allowances/ Deductions/ Overtime/ CPF
Balance Sheet Product Sales Analysis Stock Balance Personnel and Payroll Report
Bank Reconciliation Customer Sales Analysis Product Sales Analysis Leave Reports
Debtor & Creditor Statement   Customer Sales Analysis Work Force/ Turnover Analysis
Project Reports   Location Reports Net Pay by cash/bank
Consolidated Account     Yearly Employee Pay Summary
GST Form 5/ Taxable Supplies/ Purchases Reports