Whitehall Finance
Understanding
Companies look for a cost-friendly setup and hire under qualified people to look after the accounts. As accounting needs have grown complex, financial statements have become inaccurate and unreliable. An unsophisticated financial statement damages the credibility of the business and causes the company to miss out on potential investments. This raises alarms for potential investors. Furthermore, implementation of an appropriate accounting system that is accurate and efficient would make these procedures less of an issue.
An awareness and understanding of said systems are lacking in the market. Usually SME’s did not have such accounting needs as a small business might be sustainable for a small period of time, however, as they grow they become subject to a number of regulations. The introduction of tax reforms and other accounting regulations have left companies behind. Companies have resorted to rudimentary accounting procedures in order to comply with these changes.
WHITEHALLFinance
Investors have become more demanding with up to date financial statements to allow them to compare investment opportunities. Moreover, these companies are more likely to be vulnerable to fraudulent activity. This is one of the reasons why such cases have become increasingly common.
Preparing the accounts is one thing, but understanding them is another. Without a proper framework to understand the past performance and current standing of the business, companies are unable to make decisions. An understanding of the market is crucial for such analysis. Companies often make wrong decisions such as; expanding to the wrong markets or taking out a loan at the wrong time. Areas of improvement are seldom noticed. The most neglected areas of the accounts create the most problems.
