Financial reporting software can transfer your financial reporting and accounting into a much easier task by keeping all of your information up to date and in one place. Let’s explore how this can be implemented across financial accounting and reporting.
Financial reporting is the process of tracking, analysing and reporting your company’s financials. Reporting focuses on surveying the information you’ve gained through accounting processes. This analysis enables your business to assess your financial position, evaluate past performance and forecast future performance. Essentially, reporting takes a more overarching view of a business's financial position, which can help identify any areas of concern or strength. There are different types of financial reports, including:
Financial accounting focuses on collecting a business's financial data in preparation for reporting, and keeping track of income and expenses. A central aspect of financial accounting is collecting key data, including receipts, invoices and reports that relate to business income and expenses. Accounting also involves maintaining and managing financials whether this is done manually or via cloud accounting software. Some key accounting roles include:
So, what are the key differences between financial reporting and accounting? And how might you use them in your business? Let’s explore some key differences below:
The key objectives of financial reporting and accounting also differ from one another:
Both financial accounting and reporting are important for your business and each serves its own purpose to shed light on your business finances. I, in fact, they go hand in hand. Financial accounting is vital for the day-to-day running of a business. Keeping books up to date and maintaining consistent processes is key to keeping track of income and expenses and being able to prepare reports.
Financial reports are important because they can communicate to the wider business and investors how a company is performing. They can also help businesses to plan ahead, predict future outcomes and learn from past mistakes. Stability and consistency lie at the heart of a successful business in regard to financials. Both financial reporting and accounting are vital components of this.