Financial documents or Reports
Introduction
Documents are a vital part of every business. Happy Pappy will use these documents to communicate information, to analyse how the company is /performing and also to do various business transactions
We have four main types of business documents which include;
Financial documents or Reports
These are documents prepared in a standardised format to report the financial position of a company. Preparing financial documents at least once a month is an essential part of a business. The managers keep up to date with how the business is performing. Under the financial documents, Happy Pappy will have the income statement, the cash flow management statement, Accounts receivable ageing reports, Accounts Payable ageing reports and the Balance sheet
Each of the above highlighted financial documents has a purpose and the intended audience. For example, the income statement shows the flow of the income into and expenditure out of business. It will help you identify the cash cow areas in your business and the areas that need improvement. Accounts receivables statement will show you exactly what customers owe you or the amount of money that needs to be collected. Accounts payable statement, on the other hand, shows what the business owes the creditors, e.g. suppliers. The balance sheet gives a clear picture of your business financial status. The financial documents are critical to the following people;
The investors
If you are an investor, you want to put your money in safe hands. Therefore looking at the company’s future prospects and the past financial performance is very important.
The researchers / Analysts
Research analysts use financial documents to evaluate and assess the performance of industry players.
Employees
Financial documents can be useful to the managers to promote to reward employees who have performed well.
The Government
The government regulators use the financial information to make sure businesses stay compliant to the set regulations.
The company Business Plan
A business plan is as simple as it sounds. It’s the plan of action on how a business should operate and the future plans to make it thrive. It can be a simple business plan or an elaborate master plan. That focuses on the major strategies, milestones that help keep track and forecast on the future financial requirements. The plan may involve sources of funds, how the funds will be spent and the overall budget.
The business plan is very important to the following audience;
Banks or Financial Institutions
Financial institutions are very interested in the business’s ability to repay loans. So banks will pay attention to the balance sheet.
Suppliers
Suppliers need assurance that they are assured of steady and timely payments. For that, they need to look at the business plan. In fact, you are in a better position to negotiate better terms with suppliers if you prove to them your business has growth potential.
Potential Investors
A good business plan can be a tool to attract potential investors. The business plan explains the path the business plans to take.
Potential Partners
A business plan will offer any potential partners a clear picture of the expectations and the responsibilities of the new partner. Matters of accountability should be Cleary defined in the business plan.
Outside communication and Business Letters
Correspondents between suppliers, customers and other individuals outside the company are called business letters. They form an essential part of Business documents. Communication can be via email, by post, courier or hand delivery. Business letters have the following audience; Fellow business people, Suppliers, Customers, investors, financial institutions or regulatory authority.
Transaction Documents, Licenses Permits
These are essential business documents. They include lease agreements, security agreements, Registration rights agreements, Licenses and Permits. These documents can be automated for safekeeping. The audience for these documents include;
The Government
The authority may require verifying the transactional documents. The documents prove that business is operating legally.
Suppliers
Suppliers also may have an interest in the transactional documents to confirm the organisation they are about to deal with is a registered business.
Software Applications that can be used in automating document production
Software applications are programs designed for end-user that enable them to complete tasks. In the documentation, some programs are designed to help in automating business documents. The programs allow users to create interactive reports that can be accessed and used with ease.
With technological advancement, document application software’s have also advanced. Here are some features in software applications used in document production;
Enhancement and Editing Features
These are features that enhance any software capabilities. In document production enhancement features improve the document’s appearance and editing features ease the work of the user to make changes and adjustments to the document. The enhancement features include; Bold that helps to print texts darker than the original copy, Bullets that help highlight the specific item, change case options and Bullets. Editing features include cut and paste, undo, copying and pasting.
Insert Links and Images features
By selecting insert, you can easily insert a link or an image. Most web writing software’s have enabled the users to navigate, add or adjust pictures. For example, you can adjust the width or length of the image.
Why it is important to store master files an all print copies
Technology comes with challenges, and it’s important to have a backup in case the systems fail. A backup copy filed in line with the organisation’s requirement is crucial. The print copy can be used as a reference and as a factual source of information. Using print copies will avoid the over-reliance on the automated system. Considering the organisation may not have all skilled staff to manage the computerised documentation. The master copy can be used to fact check to reduce chances of corrupted data. Print copies if fired and stored in a fired roof cabinet, chances of data loss are minimal. It also helps to avoid duplicate errors where the same document is stored more than once.
Automated data may be deleted by mistake, having a master copy or a print copy will be of help. The new version documents may be altered too accidentally.
Budgetary constraints need to be considered when designing and managing documentation. Here are some of the costs that need to be considered;
Acquisition costs; when introducing the new documentation in the business. The owners need to consider the acquisition costs. These are costs that will be incurred when purchasing the new system. The acquisition cost may also include the cost of training your employees to use the new system.
Transition Cost; it’s any documented expense incurred when designing and managing documentation. When changing from the old system to the documentation system, there will be transition cost.