Tax and Financial Reports

There are several interested external users of financial reports, as well as of other accounting information. They are:

-    Investors – their main interest is getting an answer to the question if the investment of capital in the establishment of the company was worthwhile and if it created a new value (profit) or if the invested value was partially or completely lost.

Apart from current investors, potential new investors are also interested in getting an answer to the question whether the company they want to invest their free capital in is capable of multiplying this investment, and of paying the dividend afterwards (in a stock company) or net profit (in an LLC).

-    The Ministry of Finance – as a “collector” of State Budget funds, with the purpose of financing public spending, is interested in supervising the regularity of calculation and payment of tax contributions for each tax payer. Moreover, it is entitled to rule legally prescribed fines for irregularities that have been determined in a business activity, which additionally feed the State Budget.
-    Banks – as creditors, are interested in obtaining the information pursuant to which they’ll decide whether their debtors will pay their loans, plus interest, accurately and in a timely manner.
-    Business partners – suppliers are interested whether the amounts the entrepreneurs will owe them will be collectible on time, while buyers are particularly interested in the “soundness” of the entrepreneurs that supply them with goods or services, in cases when their business activity depends on the accuracy of delivering the goods.
-    The government and its agencies are interested in gathering statistical data, based on which they can make adequate decisions (regarding budget planning, determination of tax policies and etc.).

Based on the above stated, it’s not difficult to conclude that entrepreneurs must present financial and statistical reports to different institutions several times a year, whether by law or by their own decision. These reports derive from accounting processing of all the financial data arisen from their business.

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