A Financial Statement is a written report that
quantitatively summarizes the financial status of an organization for a
stated period of time. It includes an income statement and balance sheet
describing the flow of resources, profit or loss, and the distribution or
retention of profits. It is a statutory requirement for every organization,
irrespective of the kind and size, to prepare and maintain financial
statements.
In this competitive age, every organization, irrespective of its size of
operation needs to concentrate on core processes to succeed. This has
further increased the need to outsource their non-core processes to
specialists. Outsourcing the preparation and maintenance of financial
statement is one such service.
Types of Financial Statement Preparation Outsourced
Income statement: An income statement is a financial
statement containing the net income/net loss incurred by an organisation
during a particular period of time. It is also known as a Profit/Loss
Statement. Net income/Net loss is calculated by adding all the revenues
during a certain period and subtracting all the expenses incurred in the
same period. An income statement usually contains Gross Revenue (Gross
Sales), Costs of Goods sold, Returns and allowances, Selling, General and
Administrative Expenses, Net Income(profit) or Net loss.
Balance Sheet: A Balance Sheet is a very important
financial statement depicting the financial position of an organisation on a
particular date. It lists the Assets (what the business owns) and
Liabilities (what a business owes). The difference between the two is known
as the Net Worth of the organisation.
Cash Flow Statement: A cash Flow Statement depicts an
organisation's cash position during a period of time. It has three
categories: Financial Activities, Operating Activities and Investment
Activities. It also depicts the increase or decrease in cash and also the
percentage change on comparing the statements of two different periods.
