A financial statement is necessary to organize the day to day management of your startup business. You need a comprehensive report of the daily expenses your business makes and tally it with the profits that have been made. This compilation services report does not conform to the hard records of your business, but merely reflects the state of your finances so you can manage your assets or present your company to your clients or a third party organization for benefits.
Making a presentation
When preparing a report for auditing, a financial statement is the least expensive option for compilation services. It is different from tax review and audits and serves only to generate a comprehensive outlook on the current state of the assets involved with your startup business.
The report can be a complete presentation of all the financial statements for defined set of months or an individual statement that shows only the current status of finances. Both these parameters can help you evaluate the progress of your startup in the market.
A compilation of financial situation is not accepted by lenders and creditors as it does not include sources that can prove that it is a fair representation of the financial situation of the business. The compilation services will generate the report in the following format –
- An engagement letter stating the contents of the report and a summary of its contents such that it can clearly represent the current situation.
- Significant issues are reported next where it lists the most important aspects of your finances that need immediate attention.
- If there are traces of fraud, illegal activity, or other related issues that has been noted by the accountant, it is presented in the final section to bring it to your attention. This is to help you organize and legitimize your operations such that it can grow and expand without hassle.
The final step is to draw up a report of the compiled financial statement and will accompany the same. The report ascertains that the compilation is entirely unbiased and does not provide any opinion of the CPA or accountant who compiled it. This would mean that the accountant has not audited or reviewed the financial situation and the compilation has been drawn up without providing any assurance of the financial network framework.
Forecasts and how it helps
Catered to your preferences, the compilation services will ensure that your business finances are presented to you with the professionalism and neutrality you expect. This is very important in creating forecasts for your business which is a route map of the various investments and the possible returns you can expect.
It also helps you draw up an effective plan about how to best manage your assets henceforth and create an effective strategy to take your startup to the next level.