Preliminary financial statements can help entrepreneurs to plan for the future as well as to correct the loss of the financial statements to be profitable. If a big change has occurred or is about to occur in your company, or if the company has lost capital, your company will benefit most from doing a preliminary financial statement. However, we recommend that all entrepreneurs do a preliminary financial statement either by themselves or with their accountant. Unlike monthly accounting, preliminary financial statements have more detail and tell the entrepreneur what the situation will be during the entire financial year.
Preliminary financial statements may reveal important details of the company’s finances, which, with early detection, can be corrected during the financial year. For example, losses and loss of equity don’t need to be entered in the Trade Register and the accounting period may be extended up to six months if the company knows that it will be receiving income at the beginning of the next fiscal year. The continuation of the financial year must be declared to the trade register two months before the end of the current fiscal year.
Making a preliminary financial statement also speeds up the process of making the yearly financial statement. The auditors have also started checking these preliminary financial statements. If the preliminary financial statement is made in September and October, it creates a good foundation for the budget for the next financial year.
Plan for the future through preliminary financial statements. Your accountant will be happy to help you in making this.