Periodic financial reporting for SMBs is a fundamental block of financial analysis and management. Yet, small and medium-sized businesses often overlook it for a number of reasons. Limited resources, unstructured accounting practices, and fluctuating financial situations make it challenging for SMB businesses to maintain consistent, timely, and, most importantly, accurate reports.
When businesses don’t standardize financial reporting, they miss out on insights that could help them make intelligent decisions. Cash flow issues, tax troubles, and missed growth opportunities can creep in without timely financial updates.
Regular reporting keeps owners in the loop on what’s working, what’s not, and where changes are needed. It’s about having a clear, updated picture of the business so there are fewer surprises and more control over the financial future.
“Financial analysis and insights are not the only reasons why periodic financial reporting is mandatory for a business,” says one of our bookkeeping experts at Outsourced Bookkeeping. Here are a few benefits of timely and periodic financial reporting for SMBs:
Financial control: Small businesses usually have fewer financial resources and smaller revenue margins. When done accurately, regular financial reports help monitor cash flows, thereby enabling proactive steps toward financial control. In addition, they allow owners to track their performance over time, compare it to benchmarks, and, consequently, identify areas for improvement. This, in turn, helps set realistic goals and make informed decisions to drive financial success.
Secure financing: When seeking investments, loans, or grants, lenders and investors prioritize financial statements to assess the business’s financial health and risk. Regular financial reporting helps the company internally and increases credibility to secure the needed funding by building investors’ confidence.
Compliance and tax planning assistance: Financial reports are key to accurate tax filings for any business, but they are especially important for SMBs. By implementing standardized, accurate, and timely financial reporting, businesses can ensure accurate tax planning and avoid compliance risks that small businesses often face.
Despite significant benefits, most small and medium businesses still lack timely and standardized financial reporting and, therefore, miss out on many of them.
What Stops SMBs from Securing the Benefits of Periodic Financial Reporting?
In addition to the reasons stated at the start of this article, small and medium businesses are often characterized by, and to an extent plagued with, a variety of problems that make regular and accurate financial reporting challenging:
Time Constraints: Limited resources mean many responsibilities that must be juggled, which limits time. Financial reporting is a time-intensive process that often takes a back seat in SMBs.
Lack of Expertise: Even for businesses with ample resources and time, many small business owners lack sufficient accounting and financial expertise to enable accurate and timely reports.
Cost Considerations: Even if the business has the time and identifies that it needs the right expertise to help, it may be short of budget to hire the right accounting resources or
Limited expertise, cost considerations, time constraints, and scarce resources—these challenges seem endless for small and medium businesses. The way out? Partnering with an outsourced accounting service that can help compile essential financial reports.
Benefits of Outsourcing Periodic Financial Reporting for SMBs:
Access to Expetise and Specialization: Outsourced accounting firms employ specialized professionals dedicated to industry-specific accounting tasks. Outsourcing allows you to access the best talent and resources without hiring in-house.
Reduced Costs: Outsourcing financial reporting can eliminate the high overhead costs of hiring full-time staff. By partnering with an outsourcing partner, you can bid goodbye to the high payroll costs and additional expenses linked to in-house employees.
High Accuracy and Faster Timelines: With access to a fleet of skilled personnel, outsourced services offer exceptional reporting accuracy with excellent turnaround times. At Outsourced Bookkeeping, we work around the clock in the most convenient time zones to ensure complete accounting and reporting support for businesses when they need it most.
Scalability: Remember the fleet of specialist accounting resources we were talking about? They are the key to seamless flexibility that helps you overcome seasonal accounting fluctuations. Outsourced accounting firms allow you to scale services up or down as needed. You can handle peak workloads efficiently without incurring extra costs for additional personnel.
As a trusted bookkeeping and accounting partner for businesses across the U.S., Outsourced Bookkeeping has provided small and medium-sized enterprises with timely financial assistance for over two decades. We specialize in all aspects of accounting, from Bookkeeping to Accounts Payable and Tax Preparation, Financial Reporting, and all other complex accounting management tasks.
If you’re a small or medium business looking to gain the benefits of periodic financial reporting without spending additional time or hiring dedicated personnel, our outsourced financial reporting services can be a good fit. For more information on our services, please contact us today!
