Meaningful Accounting Reports

Accounting is an art and science dealing with Numbers, which have monetary value. Numbers or Financial Data are recorded in a chronological order, and the beauty of Accounting is presenting the data in a systematic layout and form that is meaningful and useful to the business management.

Various Reports like Journal, Ledgers, Cash Books, Sales Book, Purchase Book are prepared from the Accounting Data at the preliminary stage, but these evolve into Final Accounts Reports, namely Trial Balance, Trading and Profit and Loss Account and Balance Sheet.

The reports of Balance Sheet and Profit / Loss Account are typically the financial face of an organization. They represent a summary of the entire activities carried out and the net result, status of the organization in a concise form.

But, the real meaning of these reports lies in “ reading between the lines “ or “ in reading the numbers “.

The art of decoding the Accounting Reports into individual components which present insights into the functioning of the business, spotting weak links, areas of leverage, solvency etc. is vital and gaining prominence. The role of Financial Management Accountants is increasingly in demand.

Financial Management Accounting helps “ in translating “ the Accounting Data to more revealing data, which provides crucial inputs for the Management in Direction, Course-correction, Decision Making etc.

The data, when properly read into, provides feedback to the Management on grey areas, areas of improvement, areas of unnoticed wastages, inefficiencies etc.

The real meaning of the Financial Reports is presented only by an analytical viewing and presentation of the Accounting reports. It requires special skills that can be compared to a Specialist Doctor who is able to read the MRI Scan or X-Ray reports and decipher the condition of the patient. Accounting reports derive their real utility, in the management perspective, only when it is read and understood properly in context.