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Financial accounting services

Financial accounting services assist the individual or business in preparing an accurate financial report for outside parties such as investors or tax authorities. These reports will facilitate the external parties in making informed and valid economic decisions.

A business has two main objectives: earn a profit and remain solvent. Financial accounting services prepare statements that allow appraisal and awareness of an organizations financial standing to both internal and external parties. The profitability and solvency of a business can be evaluated by professional accounting services using four main financial statements.

-Balance sheet

This is a statement of the financial position within a company. This is the most important financial statement of a company. The balance sheet is based upon the accounting equation: Assets= Liabilities + Equity. Which means what the business owns is the sum of its debts plus the business profit and investment.

This equation must remain in balance and it is for this reason that financial and accounting services use a dual-entry system. Double entry accounting ensures each transaction affects each part of the equation and allows for less error.

In order to raise finances for a company, lenders analyze the last three years of balance sheets. The purpose of this financial accounting service is to have that information accurate and ready to be used by such parties.

-Income statement

This is the statement of financial results in a given period. Profit and loss statements are gathered and a statement representing the difference between the two revenues is presented. Accurate income statements aid in financial planning and reveal in what areas the organization should be focusing its available finances.

-Cash flow statement

Cash flow statements will present both the cash inflow and outflow of an organization. This analysis is crucial in financial management. Financial accounting services can make a company aware of unusual or excessive expenditure and help manage finances in a more effective manner.

-Statement of retained earnings

This statement reports changes in a company's retained earning over a given period. These may include profit or loss from operations, paid dividends, credit or loss to earnings. The statement of retained earnings provides information to the balances sheet and uses information from the income statement.

Other professional financial accounting services include fiduciary tax and accounting advice and assistance for agents, executors and administrators and trustees. Periodically keeping interested parties informed of transactions and investment policies concerning a fund.

Many small businesses use accounting software, and financial accounting services can provide consultation regarding software such as NetSuite, QuickBooks and Quicken among others. It is important to always look for a certified pro-advisor in accounting software. For larger businesses, financial accounting services include payroll tax and accruals. The accrual method of accounting records revenue and expenses according to when they were earned and not necessarily when the money was received or paid. Sales tax, depreciation and verification of data relating to accounting are all services relevant to the large and small business and provided within financial accounting services.

Financial accounting services provide the individual or the business with the professional transaction processing, accounting and financial reporting that every enterprise needs to be competitive.

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