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Four parties that want to see your company's annual financial statements

by , 22 September 2014
Annual financial statements are vital. They show:

• If your business is making a profit;
• What your business did with its profit;
• What the relationship between the assets and liabilities is;
• How much capital there is; and
• If the business will grow in the future with its capital.

If you think these statements are for your eyes only as the owner, you're wrong. There are four parties who are very interested in seeing your company's financial statements.

Read on to find out about these parties and, most importantly, why they want to see your annual financial statements so you can make them available and not lose any business.


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The four parties interested in seeing your annual financial statements are as follows 
 

#1 Interested party SARS
The reason they want to see your annual financial statements: They want to assess your tax calculations.
What happens if you don't give them the correct financial statements? You can face a SARS tax or Vat audit.
 
#2 Interested party: Shareholders
The reason they want to see your annual financial statements: They want to see where their money goes.
What happens if you don't give them the correct financial statements? The value of your company's shares may decrease.

#3: Interested party: Suppliers
The reason they want to see your annual financial statements: They want to assure themselves you can pay and you aren't going to end up on their bad debt list.
What happens if you don't give them the correct financial statements? You may struggle to buy on credit from suppliers. This could lead to slow production and lost sales.
 
#4 Interested party: Investors
The reason they want to see your annual financial statements: They want to evaluate their investment.
What happens if you don't give them the correct financial statements? Investing in your business may become a risk.

As you can see, annual financial statements aren't for your eyes only as the business owner. These four parties want to see them as well. So make sure you create statements and make them available to these interested parties.

***REVEALED: The secret to reducing your audit fees…


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