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Good day! This is Diane Gilson with Info Plus Accounting and I’d like to welcome you to
today’s session ‘Reporting Essentials’. Believe it or not it doesn’t sound like
a heavy-duty topic but boy there’s a lot I’ve found out that we are going to be covering
as I put the final touches together for this session.
First of all, we’ll talk about coordinating information and reporting needs, between the
people who are preparing them, and the end users. Then we’re going to walk through
some sample financial report formats, so you can kind of get an idea of where you’re
heading in terms of having ‘the end in mind’ with reporting.
Okay, so let’s get started. This has to do with coordinating information and reporting
between preparers and users. So this is something that lots of times doesn’t happen! We get
focused on getting our entries in, on understanding the structure and so on but why are we doing
We’re doing it so that people on the other end of the spectrum can have the information
that they need for whatever reason they need it. So this is a really good thing to do – is
spend a little bit of time on this following area and figure this out. I’m going to jump
ahead at the end of this because one of the final things I say is you need to get this
all figured out, organized, scheduled, authorized and so on.
So, first of all, who needs the information?
Well, obviously the owner or owners of the company need this information on a regular
basis. Which managers or supervisors are authorized
to see and use the information? Maybe the sales team needs to see certain
information. In many cases you’ve got bankers or other creditors who are hovering in the
background and saying, “You know, we need to see regular financial statements and they
need to look like this.” Other third parties, unions for instance,
or the government. You know, obviously we have to report to the government on a regular
basis about certain things – and it depends on your entity what that is.
Or insurance. You know that workers comp wants to be able to come in and see certain information
out of your system. So there are all sorts of other people who
may need to look at your information as well as of course the tax preparer needs to see
it, and auditors need to see it. And back to that ‘third parties’ concept,
if you’re a member of one of the national networking groups – where you actually submit
your financial information – they can have certain requirements as to how they want to
see information. Now, I’m going to take a little side trip
here as we look at this. I would like to say that, because of all of these different people
who need to see information, you can’t possibly set up your accounting system so that it will
just automatically spit this information out for absolutely everybody in the format exactly
the way they want to see it. But we can try to set up our systems so that we can meet
the most needs and doing the least amount of additional work. On the other hand, you
know if we get our systems set up logically and somebody needs the information in a slightly
different format than we have, it’s still going to be pretty easy to extract that information.
If it’s logical, and laid out in a clear manner, it’s pretty easy to extract that
information and give it to them in the format that they need to see it.
Another thing that’s really important, if you’re the one working in the books, is
to find out who’s actually authorized to see certain information – and how does that
work in your company? Some companies are very close to the vest about what information they
allow certain people to see, other companies are much more ‘open-book’ so you need
to get a good feel as to what company management wants – in terms of confidentiality, and
who can see which information. AND it’s a good idea for you to get some documentation
on that – so that you don’t get called on the carpet for giving the wrong information
to the wrong person! So, if it was me I would have a tendency to try to get some of the
things we’re talking about documented, and then get sign-off from somebody right up close
to the top of the company that you’re authorized to release these kinds of information to these
Okay, another thing to consider is what format do they need? Exactly what information is
appropriate to deliver to them? That partly encompasses confidentiality but also partly
includes what is useful to the reader of the information. If you give somebody too much
data, then the reports become less than useful for them. So finding out how much or how little
detail they need, which particular information they need so you can limit it to what is useful