With so many companies out there claiming to have a “free” financial statement template, it is easy to assume that they are providing you with the most up-to-date and accurate financial statements you can find. The reality is the opposite: these are template accounts that offer very little in the way of customized analysis. In fact, it can take a substantial amount of work and research to get a free one to actually produce a credible result. That is why companies that claim to offer free one are likely to be charging you for the privilege of a template that will not produce a credible financial statement.
First of all, you need to understand that although the website that claims to offer you a free financial statement template may be free, they are usually charging a subscription fee to access a larger database of template accounts. The free version is designed for an end user; one who may want to study the data on their own or create a personal budget for their business.
The free financial statement template will probably not provide you with the depth of information available in an actual one-of-a-kind account. It will provide basic reporting of accounts payable, receivable, revenue, expenses, and balance sheet.
Once you learn how to use this reporting tool, however, you will be able to analyze a company’s financials and compare them to what you see in your accounting system. You will then be able to make important changes or implement new processes and procedures that will allow you to reach your accounting goals more efficiently.
Because these accounting software programs are based on the same foundations as the business and consumer reporting systems used by banks and other financial institutions, the free financial statement template is usually just as reliable as the one you would pay for. Since the financial statements are based on the same format and computer code used by big accounting firms, the ones that come from smaller organizations and start-ups are generally less accurate. Since most of the paid templates available on the internet are free, the question remains: should you take the free financial statement template at face value? It is a smart idea to review each one before making a decision to purchase one.
A quality financial statement template will have several pages devoted to the different categories that account for its information. The author will include a “margin of error” section in which he or she explain how large of a range is considered to identify an error. The template will also include a section that details the methods used to generate the statement and how to correct errors as quickly as possible.
If you are confident that the financial statement template you are considering is accurate, then it makes sense to pay for a copy of it. The reason that you should pay for a financial statement template, aside from the benefit of having it for your business, is that you will be investing in software that will probably be useful for a long time. While you won’t be able to utilize it immediately, you can still use it for years to come, and you’ll know that it is produced by a professional firm.