Financial Accounting Advisory Services is a comprehensive collection of third-party expert advice for businesses and organizations for company growth. It is evaluating, recording and summarizing a company’s financial statements. These statements can be income statements, balance sheets, cash flow statements and statements of retained earnings.
The term accounting advisory services is a confusing term. We often explain the term along with those on the broader financial reporting process. This article deals with financial accounting advisory services. It also explores their importance in Indian business.
Financial Accounting Advisory Services
Accounting is essential in a business. It plays a role in tracking earnings and expenditures to ensure legal compliance. It also enables the flow of financial information to all stakeholders. Thus, its role cannot be overstated.
The result is the need for an organisation’s top-notch, high-quality accounting function. From maintaining the income statement, balance sheet, cash flow statement and other key financial statements to maintaining a strategic business perspective on the data and their implications as well as a financial information communication one, it requires both high calibre talent and time – something which internal accounting departments, especially at smaller businesses, may lack to the level necessary. That is where financial accounting advisory services come in.
Financial accounting advisory services are a powerful tool that empowers businesses and organisations to meet their financial and operational objectives. They take a broader perspective of the accounting function, going beyond statement accounts alone, and provide expert third-party strategic advice. This empowerment instils control and capability in the business’s financial management.
Financial Accounting Advisory Services: Importance
Financial accounting advisory services play a crucial role in maximizing organizational performance. They ensure that financial statements are maintained correctly, accurately, and updated promptly. Beyond this, accounting advisory services experts use the numbers to provide high-quality business performance evaluation and recommendations for improved ratios, more efficient budgeting and better financial projections in the future. This strategic advice is invaluable for making informed decisions to steer the company towards its goals. Financial accounting advisory also ensures statutory compliance by tracking regulations and addressing corresponding liabilities, such as taxes, pension funds, etc., in a timely and systematic manner. Accounting advisory aids also help file economic statements with different authorities. It involves the Registrar of Companies or stock exchanges for listed companies.
Financial accounting advisory services are precious in navigating the rapid changes in the company landscape in these high-velocity disruptive times. These changes, often driven by technological advancements and regulatory shifts, introduce new accounting and financial reporting complexities. Indeed, this is one of the key advantages of engaging in accounting advisory services today. It also explains why smaller businesses need to outsource and engage these services for affordability and increasingly by large corporations who value their high-quality navigational input.
Accounting v/s Financial Accounting.
Accounting is the recording, measuring and processing of financial and other information about businesses and companies. An accounting consultant or company will set policies and procedures for expenses, data management, and generating financial reports.
Financial consultants specifically deal with these generated financial reports based on accurate information and follow GAAP (Generally Accepted Accounting Principles). They are a collection of accounting rules and standards.
The Four Basics Financial Statements
1. Balance Sheet
A balance sheet includes a statement of assets, liabilities and the capital of the business. It deals with the balancing of expenditure and income. Assets can be said to be the things a company ‘owns’ and liabilities the company ‘owes’—also, the shareholder’s equity.
· Assets:
- Cash
- Prepaid expenses
- Accounts receivable
- Inventory
- Investments
- Buildings
- Machinery and equipment
- Vehicles
· Liabilities are:
- Cash
- Accounts payable
- Loans payable
- Notes payable
- Deferred tax
- Current tax
- Unearned revenues
- Warranty obligations
- Payroll
· Shareholders equity includes:
- Stokes of the company
- Retained earnings are to be invested back into the business.
- Comprehensive Income
2. The Income Statement
The income statement shows the company’s income for some time. Total revenue minus its total expenses equals the income of the company. The Income Statement is also referred to as the profit and loss statement. It is essential to put the revenues more than expenses. Thus, the business is profitable.
3. The Cash Flow Statement
This financial statement shows the changes in balance sheet accounts. It documents the company’s income and dents over a period. The primary function of this statement is to understand whether the company has enough working capital to run the business and pay its employees and debts.
4. Statement of Retained Earnings
It is a crucial monetary document that explains how much earnings a business has accumulated and kept since the beginning. It shows the company’s current financial position so that it understands whether to invest more.
Startup Fino’s Financial Accounting Advisory Services
At Startup Fino’s Corporate Services, our proven methodology and professional experience in accounting advisory services have been helping organizations streamline their accounting and financial reporting process for two decades, enabling high-quality reporting with fewer resources. Our clients have achieved faster closure rates by documenting and evaluating their current closure processes. It also identifies the gaps and deficiencies between different sub-processes that cause delays. We deliver increased accuracy and faster and more efficient reporting, i.e., the essence of financial accounting advisory services.
Our accounting advisory services experts analyze the client’s financial processes. It also identifies weaknesses in the master data and data-entry processes. We help maintain internal controls by identifying the effectiveness of critical controls in the accounting and financial reporting process.
The methodology of accounting advisory services and financial accounting advisory at Startup Fino assists clients in every aspect of the accounting closure process. It is from initial scoping to project execution. It leads to its finalization, too. We also help with project and change management. Thus, you can capitalize on the advantages of enhancing your internal processes.
Startup Fino’s teams support you in observing and deciding financial and nonfinancial insights.
Accounting Advisory Services Involves:
- Accounting advisory on complex accounting issues
- Coordination with teams at remote locations – units/plants
- Support in Management reporting to the group companies as per the group accounting policies or International Financial Reporting Standards (IFRS)
- Preparation of group accounting package as per group guidelines
- Preparation and maintenance of books of accounts as per applicable accounting framework
- Continuous communication with suppliers, customers and capital providers
- Any other area in financial reporting where assistance is required
Winding Up Thoughts
Financial Advisory Services is essential for a business organization. The four basic financial statements mentioned above are legally required for registered companies. Advisory services thoroughly study and evaluate these sheets to help the organization or company with its business.
The statements allow company management to determine financial issues and plan for the future. Before investing in a company, investors generally check the company’s financial statements in which they are looking to invest.
Even if the company is subjected to an IRS audit, the government auditors will review these details for complete analysis. If the company wishes to get a loan from the bank, the bank may request certain financial statements to check whether the company can afford a loan on their current financial status.
Contact Startup Fino and win with our Financial Reporting and Assurance Services.
FAQs
What are called financial accounting advisory services?
Financial accounting advisory services are specialized consulting services. It helps businesses with their financial reporting, compliance, etc.
What businesses get advantages from financial accounting advisory services?
Businesses of different sizes can benefit from financial accounting advisory services. Companies facing complex financial issues and challenges are important.
What specific services are offered by financial accounting advisors/Firms?
Financial accounting advisory firms offer a wide range of services. It involves financial statement audits, internal controls assessments, etc. It also allows accounting standard implementation and financial due diligence.
How can financial accounting advisory services help with financial performance?
Financial accounting advisory services can help businesses. It improves their financial reporting accuracy. It also enables efficiency and compliance. After all, these can be done by providing expert guidance and strategic recommendations.
How do financial accounting advisory services differ from traditional ones?
Financial accounting advisory services provide specialized guidance on financial issues. However, traditional accounting services focus on preparing financial statements. They also analyze it.
When are financial accounting advisory services needed?
A business may need financial accounting advisory services if it is facing challenges. It involves challenges in regulatory compliance, internal controls, etc.
