Sadly enough, some of these Micro, Small and Medium-sized Enterprises (MSMEs) are not paying adequate attention to financial records of their businesses, and writing up Books of Accounts, and thus, missing the benefits of financial data and key performance indicators(KPIs) as measures of performance
By Nwokolo Charles Ike
Financial statement information is the financial and business data generated through Book keeping and accounting processes. These data are derived in a company’s financial Statements such as Comprehensive Financial Position Statement (Balance Sheet), Income Statement and Cash flow Statement.
Data generated are analysed, interpreted and evaluated to gain insights that aid decision making. Such Financial data, profitability, liquidity, efficiency, growth etc. are used to assess and evaluate the financial performance, health, and stability of a company or investment project.
Data, Digital transformation and Business Decisions are reshaping the way businesses are managed and controlled to achieve meaningful growth and survivability. Sadly enough, some of these Micro, Small and Medium-sized Enterprises (MSMEs) are not paying adequate attention to financial records of their businesses, and writing up Books of Accounts, and thus, missing the benefits of financial data and key performance indicators(KPIs) as measures of performance.
These entrepreneurs who may not have the time and expertise to manage their financial books should engage Accountants or Bookkeepers to handle accounting and bookkeeping and work closely with management to:
Developing Financial Report
With the increased growth of (MSMEs) in the country, there are great needs for the operators to be supported with financial systems, budget and budgetary control, business plans and risk management to enhance their capacity to grow wealth and achieve financial stability
The Accountant can prepare financial Statements, develop report and measures that will assist management in assessing the performance, financial position and the future direction of the Company.
Evaluation of Investment/Project
Cash flows projections can be developed to help determine the feasibility or viability of investment projects and the financing decisions to fund such projects.
Allocation of Resources to Tasks
Management of a business can refer to accounting data generated by the business Accountant to make decision such as allocation and utilization of resources.
Compliance Requirements
The report also help in meeting compliance requirements of the Laws and accounting standards such as payment of taxes and reporting to Corporate Affairs Commission (CAC).
Strategic Decisions
Insights derived from data presented by the Financial Statement help management strategic decisions such as creating new market, business expansion, customer relationships management, risk control measures, and monitoring of performance and sales.
With the increased growth of (MSMEs) in the country, there are great needs for the operators to be supported with financial systems, budget and budgetary control, business plans and risk management to enhance their capacity to grow wealth and achieve financial stability.
•Nwokolo Charles is a Consultant and he can be reached at cinwokolo@gmail.com, 08030599774.
