Raising Money

Advantages of audited financial statements

Do you have any plans of going in for a start-up? Are you an entrepreneur who is planning to start a business? Are you a business owner contemplating to expand your business? Have you any plans to take over another business? And, unless you have substantial money of your own, you will have to go in for a bank loan. Before you approach a bank or a financial institution for a loan for your business needs, there are a few things that you ought to know. Read this article and you will understand a number of things about audited financial statements.

At least 50 per cent of the loan applications from small and medium businesses are rejected by banks for one reason or the other. The lending sector is very stringent about its norms and policies, and your application will be rejected outright if it does not adhere to their norms. The lending environment is quite tough, and businesses seeking loans may find financial institutions could accept their proposal if they were to submit audited financial statements. Financial experts are of the opinion that submission of financial statements does have a bearing on the fate of the loan application.

Going to an auditor would indeed be a costly affair, but perhaps, well worth the effort. So, when you invest in audited financial statements, you can be certain of having your loan application viewed favourably, but you should review the cost of obtaining the financial statements from the auditor versus the amount of capital you need. Banks have special requirements and as some bankers could be finicky about the auditor firm you choose, you could ascertain this from the bankers before you choose an auditor. Banks have specific requirements and standards that need to be met to ensure a very good chance of your loan application being approved.

Therefore, talk to the loan manager prior to hiring an auditor, and find out exactly what the bank is looking for, and whether or not they are comfortable with the auditing firm you are planning to use.

Studies have revealed that only about half the number of the loan applications get approved, and so many of the entrepreneurs do not think it worthwhile pursuing a loan from the bank. But, apart from seeking loans from banks, audited financial statements provide other benefits to business owners.

But, do you know what exactly is an audited financial statement? Audited financial statements are financial statements of a company, prepared by a Certified Public Accountant or a Chartered Accountant for presentation to financial institutions for availing loans, or any one else who has an interest in it. The audited financial statements gives reasonable assurance that the financial statements are in accordance to the norms of the financial reporting framework. This important financial document is proof to the lender that the business is financially sound and is following good business practices. Technically speaking financial statements add credibility to the organisation’s position and performance not only to its stakeholders but to any one else.

Entrepreneurial Learning

The lending sector is very stringent in its norms and policies, and your application will be rejected outright if it does not adhere to their norms. Though the economy is improving getting loans for small and medium businesses is still taking time. The lending environment is quite tough, and businesses seeking loans may find financial institutions more friendlier if they were to submit audited financial statements.

Leave a Comment

Your email address will not be published.

You may also like

Growing a Business

Want Great Guidance ? Find yourself a Super Mentor

post-image

They are the gods of small businesses, those inspired individuals who have achieved the highest levels of success. They can be the shining beacons who light up the path of running your business with their vision, wisdom and wealth of resources and contacts. They are The Mentors.

If you are fired with the passion to take your business to great heights, the best thing to do is find yourself a super mentor. Here are some tips to help in your quest

Pinpoint your Need

Sit down and focus your thoughts on your business growth strategy. Which area of the business needs a lift. Is is staffing, is it the finances, is it the production, is it the your lack of customers or is it the business as a whole that needs a makeover. Once you’ve zoomed in on the sore spot, this is where you need…

Read More
Growing a Business

Dreaming Big? You can Move Mountains with these Business Productivty Tips

post-image

You may be full of admiration for some people who seem to manage themselves and their work so usefully and efficiently. They seem to fit in so much productive work into the same number of hours which everyone has.. Let’s look what makes them tick and take a few tips.

Learn to identify your most productive hours

Its true, most productive people know which time of the day they can be most creative and efficient. They identify and allot these hours for the best part of their work. This way they are able to give their 100% awareness to the job and business productivity.

Early to rise- A winning habit

Waking up early is a personal habit that has all the plusses on its side. You need not necessarily go to work that early. It’s a habit that gives you more time for personal care, like mediation, exercise, walking,…

Read More
Growing a Business

Leadership Qualities that can make you an Icon

post-image

You may have reached the leadership position through sheer dedication to performance and a do or die attitude . Now that you are at the top, your viewpoint needs to change. You have to now be a role model, one whom others will look up to and follow. Here are some tips that can shape your leadership and management skills

Be Competent: Employees will look up to a leader who has good industry knowledge and management skills. If you do not possess these skills you should surround yourself with knowledgeable people who can offer good counsel. Competence is a trait all employees will admire.

Be Trustworthy: No one will look up to a person they cannot trust. Your employees will want to rely on you and count on you. In difficult situations, leaders are expected to apprise their employees of the situations and find solutions on how to address…

Read More
Raising Money

Are You offering Your Services Using the Right Pricing Strategies?

post-image

In these times of fierce competition, business people , mostly those that offer services and belong to the service based industry, are finding it a challenge to implement the right pricing strategies. It is virtually a struggle to set the right business price that will retain and attract the customers, and not drive them away. Follow these tips, the crucial dos and don’t s and you may be in a much better position to offer your services at the best price.

Maintain your Business identity and Dignity

If you are offering a unique or special product or service, don’t underrate it just because you want to build a better relationship with the customer. This will just cheapen your offering as another run of the mill. If its something special you are offering the customer, then communicate this fact to the client and get the equation right with the most…

Read More
Raising Money

What is a Fair Wage? How Do you Assess Fair Wage?

post-image

How do you figure out a fair wage?

This is a very common question for startups and small businesses. They can’t seem to decide or understand how to set wages and manage reputations at a time. They are determined to pay well but they also have to think about encouraging their employees to stay with them for a long time. This is why there is a need to think strategically.

Listed below are a few expert tips to help you decide:

Don’t Focus Only on Money

Money should never be the main focus for you or for your employees. You should decide on the wages in such a way that your employees are tied to your business. When your business does well they should be able to taste that success and vice versa.

Also, think about additional perks such as exclusive benefits and time off. Many employees value this more than the overall…

Read More
Raising Money

Tips to Winning Hard Negotiations With Ease

post-image

While some negotiations are easy, others are quite hard to win. If you stumble you will lose.

Whether it is a potential client or an investor, negotiations can be very tough and frustrating. The problem is that the moment you let your frustration overwhelm you, you will lose the deal and you will give in to whatever is being offered to you. In order to avoid that, here are tips to overcome tough times and to win even the hard negotiations:

Research!

Know your opponent as well as possible. This is the rule no matter what you do. You should understand your opponent to the T. Who the person is, what his culture is, what he thinks, what he stands for, how is his network, etc. are the questions you should ask yourself and answer through research before meeting up for the negotiation. Understanding the opponent will give you a great advantage.

Walking…

Read More