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Why It’s Important to Get Your Company’s Financials Done on Time
Have you completed your company’s year-end financial statements yet? Most calendar-year entities issue their year-end financials by March of the following year. Lenders and investors may think the worst if a company’s financial reports aren’t submitted in a timely manner. Here are three assumptions your stakeholders could make when your financial statements are late.
Maner Costerisan is here to help you answer any questions that you might have when it comes to preparing your financial statements. You can reach us at maner@manercpa.com or by calling us directly at 517-323-7500.
1. Negative financial results
No one wants to be the bearer of bad news. Deferred financial reporting can lead investors and lenders to presume that the company’s performance has fallen below historical levels or what was forecast at the beginning of the year. Some companies also may procrastinate issuing financial statements if they’re at risk for violating their lending covenants.2. Weak management
Alternatively, stakeholders may assume that management is incompetent or disorganized and can’t pull together the requisite data to finish the financials. For example, late financials may be common when a controller is inexperienced, the accounting department is understaffed or a major accounting rule change has gone into effect. Delays also may happen when external auditors and managers are at odds over adjusting journal entries — or when auditors are unwilling to issue an unqualified (clean) opinion or have going concern issues. Delayed statements may also signal that management doesn’t consider financial reporting a priority. This lackadaisical mindset implies that no one is monitoring financial performance throughout the year.3. Occupational fraud risks
If financial statements aren’t timely or prioritized by the company’s owners, unscrupulous employees may see it as a golden opportunity to steal from the company. Fraud is more difficult to hide if you insist on timely financial statements and take the time to review them.Don’t procrastinate
Late financial statements cost more than time; they can impair relations with lenders and investors. Timely financial statements foster goodwill with outside stakeholders. We can help you stay focused, work through complex reporting issues and communicate weaker-than-expected financial results in a positive, professional manner. © 2024Maner Costerisan is here to help you answer any questions that you might have when it comes to preparing your financial statements. You can reach us at maner@manercpa.com or by calling us directly at 517-323-7500.
The materials provided in the News & Insights section are for general informational purposes only and may not reflect the most current legal, tax, or financial developments. While we strive to ensure accuracy at the time of publication, Maner Costerisan does not guarantee that the information remains up-to-date or free from error. We recommend consulting directly with a Maner Costerisan team member to confirm the applicability and relevance of any information to your specific situation.