The Easily Ignored Sections of Annual Reports—What Secrets Do They Hold?

Making the decision to invest in a company can be tough, considering the intricacies involved. Some people make it on a feeling of gut while others—the smarter ones I’d say—do it on the basis of a company’s annual report. The importance of a company’s annual report cannot be stressed upon enough when it comes to getting a good picture of the company, yet it’s not given its due importance by most investors. Here are some of the sections of annual reports that most investors conveniently decide to skip:

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The Auditor’s Report

 

Imagine making a decision to invest into a company based on its high account receivables (an extremely simplified example) without having the knowledge that the auditor had given a note regarding it indicating that, to the best of their knowledge, a part of these receivable will be unrecoverable. What then? It’s pivotal for investors to, at least, look at the auditor’s report once to ensure that there are no modifications that have been issued. Check also to see if a company is in the habit of changing its external auditors regularly. It might be more relevant for you than you may think!

The Director’s Report

The Director’s Report lists among the most commonly ignored sections of the annual report, by an average investor, owing to the fact that some investors don’t feel that words should be made a part of a report that describes a company’s financial position. To put it in a nutshell: the Director’s Report will tell you about any expansion plans that the company might have. This, when combined with the economic outlook, contribute to be an effective meter in the determination of the future of the company.

Corporate Social Responsibility

Companies tend to make profits…big profits. Wouldn’t you want to know how those profits are impacting the society? Companies have a responsibility to carry out their CSR initiatives owing to the fact that they generate their profits off of the society. If a company hasn’t been conducting its CSR activities like it means (painting a few walls in the name of it) then you truly need to consider whether such a company—that doesn’t seem to care about the society—deserves to get a hold of your hard earned money.

The Business Model

Considering the fact that a company’s business model, pretty much, dictates the performance and direction of the company, it’s a surprise that more investors don’t pay much heed to it. Looking at a company’s business model not only tells you how it has gotten to where it is (a priceless piece of knowledge, no doubt!) but it also informs you of what the company intends to do in the future. Considering that the investments you make today will reap benefits in the future, isn’t it important to have an idea of what the future will be like for the company?

According to the greatest investor of all time, Warren Buffet, “Read 500 pages every day. That’s how knowledge works. It builds up like compound interest”. Reading, truly, is the habit of the truly successful people. However, if you’d like an expert’s advice on a company’s annual report, our professional experts at SKB Accounting will be more than happy to be of assistance.

Reasons Why You Should Use Accounting Software

Accounting software is, perhaps, the number one requirement of all businesses, big or small. However, it is mind-boggling to see that many businesses, especially SMEs avoid  leverage accounting systems—such as QuickBooks, Xero, App Folio, Sage and many others to streamline and automate their day-to-day accounting needs. .

We believe automating business processes is crucial for growing a business. It reduces the hassle and allows the owners to focus their energy on growing their business. This is why our team is committed to educating businesses and working with them to find the right accounting software for their needs.

If you’re skeptical and wondering why you need to invest in a good accounting software, then here are the top reasons:

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Consistency

The biggest reason why a business—especially a small one—should be using an accounting software is to streamline their bookkeeping. When it comes to managing your accounts, there is no room for mistakes (classifying accounts receivable as cash). It has to be done by the book. A small mistake can lead to wasting tons of hours going through all your records.

Additionally, accounting software is faster. With the right software in place, you can be sure that you won’t face consistency issues in your books anymore!

Simplified Reporting

Gone are the days when you—or your staff—needed to spend a lot of time generating accounting reports. From extracting data to analyzing numbers, to proper formatting to generation of graphs and statistics—all of these can be performed quickly with an accounting software.

Additionally, accounting reports can be generated in a matter seconds, with just a few clicks—if accounting software has been employed. This means you gain deeper insights into your business financials without worrying about the time it will take to compile a report on Excel or the accuracy of the reported data.

Conservation of Time and Money

For a business owner time and money are everything, right? We often hear owners worrying that “I didn’t get the time today to visit this vendor! I didn’t know we were short on cash to order the supplies!” among other things. However, accounting software has got a thing or two to say about that!

Accounting software can do wonders when it comes to serving a business owner’s time and money. How? A business owner will neither need to spend extensive hours in managing his books nor will they need to pay someone else to do it for them. There can be no better deal!

Easier Audits

One of the biggest reasons for the problems in audits is human error. While erring is a part of being human, the nuisance that human errors cause in audits make auditors want to pull their hair out. Why wouldn’t it? Human errors—especially the minor ones—are tough to detect and even tougher to take care of owing to their impacts on multiple financial statements. With the use of accounting software, however, you reduce the chances of such errors. And even if an error is made in data entry, it can easily be corrected in one place without any concern for additional adjustments.

Concluding Remarks

These reasons are, merely, the tip of the iceberg when it comes to the advantages that accounting software has got to offer. There is no reason for businessmen, in this day and age, to not automate their accounting with accounting systems.

Are you considering getting accounting software for your SME but don’t know which one will cater to your needs? Don’t fret, for SKB Accounting has got your back. When it comes to accounting software, we will provide you all of the advice that you will ever need!

5 tips on how you can be more organized

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One of the biggest challenges in the life of the chaotic small business owner is Personal Organization.

5 tips on how you can be more organized.

Tip #1 :-  Make sure that you have one physical inbox. Now, what you do with that one inbox. That is the place where everything that is unresolved. Everything that is out of place put it in the box, now in the beginning you might need a very big box. This tip will set you up very nicely for the last two tips, I am going to show you.

Tip #2 :-  Get a Mobile inbox. You are going to be a way from the office time to time, and people gonna hand you cards and brochures whatever we need to have one place where all of those things go.  Then you get back to the office what you do with it, dump everything from the mobile inbox into the physical inbox.

Tip #3 :-  Create Homes. I teach my clients this phrase, everything has a home and no visitors allowed, a home is something that has walls around that create natural barrier between the things that is supposed to be inside of it and anything else. If you have clearly define homes when it comes time to put things away, you know exactly where those go if you need to even use a label for those homes.

Tip #4 :-  Process Scheduling. In particular you have a set processing time that you refer to go to that every single week. How much you spend processing, I recommend 5 hours a week and during that 5 hours, you going to take each item in the inbox and decide that what you are going to do with it, when you are going to do it, and where is it home? What-When-Where.

Tip #5 :- Processing. It is so important, I am emphasizing it twice, If you have that regular Schedule you stick to that regular schedule. You are going to be able to stay on top of everything. But what most of Entrepreneur do is they make that processing decision constantly throughout the day. The doing a little bit here in a little bit there’s constant over the place, which chops up your day instead have regular said time.

Process!  Process!  Process!

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