What is the difference between Financial Reporting and Financial Statements?

While the words "financial statements" and "financial reporting" are often used interchangeably, they are not synonymous. A “financial report” is a broad concept that encompasses a variety of different types of reports. Financial statements are an example of a filing that falls into the category of financial report. To put it another way, all financial statements are accounts, but not all reports are financial statements.

Financial accounts collect and disseminate relevant financial data to the general public. This covers a wide range of topics:

• Income statement, statement of cash balances and balance sheet are examples of financial statements.

Quarterly and annual reports

• Quarterly profits are announced in press releases, phone calls, and on the company's website.
• Government bodies such as the Securities and Exchange Commission produce quarterly and annual reports (SEC).

It's important that the financial records are correct and delivered on schedule. This enables the company to make well-informed strategic choices while still ensuring conformity and a positive image in the market. A good financial reporting approach should be quick to implement, simple to use, and consistently reliable.

Financial management programme can be integrated into the current general ledger or enterprise resource planning system, providing you with efficient and modern reporting features without the high cost of upgrading your GL or ERP system.

You'll see an increase in efficiency if you've introduced the right monitoring approach. Even when combining data from several sources, locations, and currencies, creating, packaging, and delivering reports can be achieved with accuracy and speed. Since reports can be automated, they are perfectly formatted for your needs–whether they are for the board or the SEC.

Financial statements are used to provide facts about a company's financial status, cash balances, and operating performance. This detail aids the listener of these comments in making resource distribution choices.

The Income statement, cash flow statement and balance sheet are the three most general financial statements.

• The income statement shows the number of revenue and the extent of different investments, as well as the potential of the company to make a profit. It can be used to spot patterns.
• The balance sheet is used to reflect on the financial state of a company as of the balance sheet date. It's used to calculate stuff like liquidity, leverage, and finance.
• The essence of cash collections and disbursements is seen in the declaration of cash flows. This is an extremely valuable financial document because cash balances do not necessarily balance sales and costs as seen in the income statement.

Financial statements as a whole can be used to make credit decisions, spending decisions, tax decisions, and union negotiating decisions.

Financial reporting provides you with a good picture of your business's success. It provides clarity, allowing you to get a clear picture of your company's wellbeing.

With financial statements, you should be able to tackle the following questions:

• Are your prices effective?
• Is your business growing (earning more than in the past)?
• Which customers spend the most?

Bookkeeping isn't the most thrilling aspect of running a business. But, if you have to keep track of transactions, why not use financial statements to your advantage? Set aside time each month to prepare and review financial records, and use the information to make informed business decisions.

Examples of financial reporting for small businesses

Financial statements come in a variety of formats. Here are three claims that small companies often make:

• Balance sheet

The balance sheet depicts the financial situation over a particular time frame. The balance sheet is where you keep track of your assets, liabilities, and equity. You can see the net worth of the company when looking at the balance sheet.

• Income statement

The income statement is a graph that shows how well a company has performed over time. In the income statement, you report sales, costs, and net benefit. This assertion shows how profitable the company is.

• Cash flow statement

The cash balance statement demonstrates your financial management skills. As you collect payments and make transactions, it records the incoming and outgoing currency. Make sure you have sufficient cash on hand to run using the cash flow statement.

Financial statements are an example of a filing that falls into the category of financial report. To put it another way, all financial statements are accounts, but not all reports are financial statements. Income statement, statement of cash balances and balance sheet are examples of financial statements. Financial reporting provides you with a good picture of your business's success.