Required Reports

Most entities report to outside parties. All entities with employees must report information about the earnings of and amounts withheld from these employees. Profit-oriented entities must file corporation tax returns. If they collect VAT or Sales Tax, entities must report and remit the amounts collected. Many nonprofit entities must report to the government and/or to organizations that provide them with resources. A company must report to its shareholders. If an entity wants to borrow money, it usually must furnish financial information to the prospective lender.

Information of this type must be collected, and it must be collected in the way that recipients specify. Much of this information is also useful in managing the entity. The point is that any information is optional. You collect it only if you decide that the benefits of doing so are worth the cost of keeping the accounting records.