Aligning financial reports, Financial Management

Aligning Financial Reports:

The primary purposes of financial systems are to provide information to interested parties.  Any reports produced through the financial management process must therefore align with the particular needs of these parties.

These parties are commonly called 'stakeholders' as they have some interest in the business as either direct owners, creditors with an interest in the financial position of the business, or the users of information under a statutory obligations such as the Australian Tax Office (ATO). 

They can be broken down into Internal and External users.

 Internal Users

  • Business owners
  • Management (department heads)
  • Relevant personnel within the organisation who may have a requirement to comply with certain financial requirements

External Users

  • Statutory entities (ATO, Office of Consumer and Business Affairs, Australia Competition and Consumer Commission, Australian Securities and Investment Commission)
  • Financial Institutions (Banks)
  • Suppliers (who requires evidence of financial performance prior to offering credit)
  • External Investors (if not involved in the day to day running of the organisation)

As the various classes of stakeholders all have differing requirements for information, financial reporting should align closely with those various requirements. 

For example:

A report produced for the purposes of providing information to the ATO will be markedly different than that prepared for the purposes of management evaluation.

Other types of reports may include:

  • Sales reports: settled sales for the particular period, usually required by the principal and head of sales department
  • Sales in progress reports: properties under contract but not yet settled
  • Listing reports: properties listed during the particular period
  • Outstanding deposits: those contracts where purchasers are yet to provide a deposit (placing the sale in jeopardy)
  • New managements (property management): those properties new on the rent roll
  • Lease renewals: renewed leases
  • Rent arrears reports: those properties with rental payments in arrears

In relation to internal parties, it would be prudent to engage the input of all staff to gauge particular requirements.

Similarly, in relation to external stakeholders, outside assistance should be sought to ensure the peculiar requirements of the various statutory bodies/financial institutions are taken into account. This is especially so given such requirements routinely change.

Only once all the requirements are established can the organisation properly develop a financial system which will meet those demands.

Posted Date: 10/1/2012 4:01:30 AM | Location : United States







Related Discussions:- Aligning financial reports, Assignment Help, Ask Question on Aligning financial reports, Get Answer, Expert's Help, Aligning financial reports Discussions

Write discussion on Aligning financial reports
Your posts are moderated
Related Questions
Q. Discuss the techniques to manage risks? Once risks have been identified and assessed, all techniques to manage the risk fall into one or more of the four major categories li

The TERRIER program cost estimate is in constant FY 2011 dollars, while the SPANIEL program cost estimate is in constant FY 2014 dollars. what is the most valid way of comparing th

CONCEPTS OF WORKING CAPITAL There are two concepts of Working Capital - Net working capital and Gross Working capital. 1. Gross Working Capital Gross Working capital re

Revenue Recognition or Realisation The resources of business are utilized to earn revenue through sale of goods or rendering of services.The American Accounting Association d

Citilink has a business line currently owns and runs 350 sightseeing buses and has a turnover of $10 million per annum. The current system for allocating jobs to drivers is very i

Securitization has attracted a widespread application of the technique to residential mortgage loan, the easiest class of a financial asset to securitize, and to

VK Ltd a multi-product Company, furnishes you the following data relating to theyear 2000.First Half of the year Second Half of the yearSales Rs. 45,000 Rs. 50,000 Total Cost Rs. 4

Explain about the in-quote-driven according to trade intermediation. In quote-driven dealer markets, a market-maker or dealer is onto one side of each trade. (Remember that dea

Q. Explain Net Present Value Method? Net Present Value (NPV) Method: - This process measures the Present value of returns per rupee invested. In this method present value of

How to Industry analysis and finally stock picking from Buy-side perspective