What is an Accounting Year?
An accounting year is annual financial reporting period in which company organizes its financial data. It is useful when you are running a business. Potential shareholders analyze the company’s performance through its financial statements. That’s why it is important to keep your financial records clear and prepare them regularly. Typically once a year each company is preparing balance sheet, profit and loss account and cash flow. This year is cold accounting year.
All financial data is gathered and used for the compiling of external and internal reports published in financial statement.
An end year report entails:
- An income statement: It shows all the transactions that the organization conducted over a period. The records include gains, expenses, sales, and losses by the company
- A cash flow statement: It shows how cash flows both in and out of the company and what is the profitability of the company
- A retained earnings statement: It usually presents the total profit that the company made over a year
How an Accounting Year Works?
A company has to define the period when the accounting year begins and ends. The accounting period is different in different countries but usually it lasts 12 months. In some cases 18 months.
How can MoneyPenny Help You?
Compiling financial reports can be quite complex. MoneyPenny helps you compile all the financial data you need in one place. Streamline the financial reporting at your organization to avoid accounting issues and taxes problems.