Financial Accounting Advisory Services is the comprehensive collection of third party expert advice for businesses and organizations for the company growth. It is the process of evaluating, recording and summarizing the company’s transactions in financial statements. These statements can be, income statement, balance sheet, cash flow statement and the statement of retained earnings.

Difference Between Accounting and Financial Accounting

Accounting is the process of recording, measuring and processing of financial and other information about businesses and companies. An Accounting Consultant or company will have set policies and procedures for expenses, management of data and the generation of financial reports.

Financial consultant is specifically dealing with these generated financial reports, which are based on accurate information and follow GAAP (Generally Accepted Accounting Principles). They are a collection of accounting rules and standards.

The Four Basics Financial Statements

• Balance Sheet

A balance sheet includes a statement of assets, liabilities and the capital of business. It deals with the balancing of expenditure and income. Assets can be said as the things a company ‘owns’ and liabilities which the company ‘owes’. Also the shareholders equity.

Assets:

1. 1. • Cash
      • Prepaid expenses
      • Accounts receivable
      • Inventory
      • Investments
      • Buildings
      • Machinery and equipment
      • Vehicles

Liabilities are:

1. 1. • Cash
      • Accounts payable
      • Loans payable
      • Notes payable
      • Deferred tax
      • Current tax
      • Unearned revenues
      • Warranty obligations
      • Payroll

Shareholders equity includes:

1. 1. • Stokes of the company
      • Retained earnings which are to be invested back into the business.
      • Comprehensive Income

Therefore Assets = Liabilities Shareholders equity.

1. 1. The Income StatementThe Income Statement shows the company’s income for a period of time. Total revenue minus its total expenses equal to the company’s income. The Income Statement is also referred to as the profit and loss statement. It is important to keep the revenues greater than expenses, so that the business is profitable.

1. 1. The Cash Flow StatementThe Statement of cash flows is a financial statement which shows the changes in balance sheet accounts. It documents the company’s income and dents over a period of time. The main function of this statement is to understand whether the company has enough working capital to run the business and pay its employees and debts.

1. Statement of Retained EarningsThis is a key financial document that shows how much earnings a company has accumulated and kept in the company since the beginning. It shows the company’s current finance position so that the company understands whether to invest more or not.

Conclusion

Financial Advisory Services is very important for a business organization. The Four basic financial statements which are mentioned above are legally required for registered companies. Advisory services study and evaluate these sheets thoroughly to help the organization or company for their business

The statements allow company management to find out financial issues and plan for the future. Before investing in a company, investors generally check financial statements of the company which they are looking to invest in.

Even if the company is subjected to an IRS audit , the auditors by the government will go through these details for complete analysis. If the company wishes to get a loan from the bank, the bank may request certain financial statements to check whether the company can afford a loan on their current financial status.