The purpose of financial statements
Financial statements are the way that you can track the performance and changes of your company or organization. Regardless of the type of business or nonprofit you are running, there are many different people that would be interested in the financial statements because they are useful in the economic decisions of that company.
Owners and managers need financial statements to make day to day decision regarding the company. Board of directors, shareholders and donors use financial statements to assess risk and return on investment. Prospective donors and investors use them to their risk and return on their investment and the financial health of a company or organization. Banks and funders use them to access the loan or funded grant. They are looking to assess if the loan or grant would be a bad business decision. Employees use them to determine their future within the company and competitors use them to compare how they are doing vs. the competition.
Financial statements tell the story of your company's health, potential for growth, risk and return on investment.
Why do I need a CFO?
You didn't start your business or become the head of an organization because you are a financial expert. You are there to grow and succeed. The accounting, bookkeeping and financial aspects of your business are important to how you run your company, but it is time consuming and if not done properly, can lead to more headaches down the road.
Keeping track of your bookkeeping and your financial statements is time consuming and difficult to manage. But most frustrating is understanding and interpreting your financial picture from reports. CFOs are responsible for timely and accurate presentations and financial reports in order to capitalize on your growth.