A statement of affairs template is a type of document used by organizations to present their company’s affairs to their stakeholders or possible clients. This statement includes a detailed analysis of the company’s liability, assets and reveals their financial status at the moment. Generally, statements of affairs are prepared at a certain time, usually at the end or start of the year. Moreover, it is an important step for the company to get an overview of their liabilities, assets and how much money they have spent on them in the past year. Basically, it is a written summary of the money that the company has spent on its assets and liabilities in total. This not only enables the owner to know where their money was used in the past year but also allows them to evaluate whether it brought them profit or loss.
Importance of a Statement of Affairs:
Now that we have discussed the details of the statement of affairs, it is almost clear as to why this document is important for every company. Actually, it not only enables you to show your clients where you stand financially, but it also impresses them when your statement of affairs is neatly arranged and your finances are managed properly. Moreover, this increases the client’s confidence in becoming your customer. When a client or stakeholder enters a market, they want to target a trustworthy and reliable company. In order to achieve that, you need to ensure that your company’s finances, projects, operations and results are neatly managed in a record. This gives the client the idea that by investing in your company they can expect a good outcome as you keep proof and record of every nook and crook.
How to Create a Statement of Affairs?
Creating a statement of affairs can be a very difficult and time-consuming process. Nevertheless, the benefits which this statement provides are worthwhile. An organization can hire a professional to make their statement of affairs or assign one of their employees to do it. There are a few things that you must include in your statement of affairs.
Format: this document usually has a specific format which is based on a table with the two headings: assets and liabilities. Under these headings their respective expenses are written along with the exact amount. At the end of each list, there is an aside to-side comparison between the total amount of money spent on liabilities and on assets. You can also include the amount of profit gained in the last year separately to make things easier for the viewer.
Assets: the list of assets used by the company in the past year and the amount spent on buying them in stated. This could include; properties bought, office furniture, electronics or machinery, debtors, cash in hand and bank. This will allow the possible client to see how much the company invests in their assets in total.
Liabilities: whereas, the list of liabilities includes the starting and ending capital of the company. It also comprises amount of revenues, creditors, debts and bank over dues. This list enables the client to get an idea about where the company stands financially and if they are worth investing in.
