September 29, 2022

How to Automate Data for Financial statement Analysis with VisionERA?

Creating financial statements and its analysis can be tricky considering the amount of variables involved. Learn about financial statements and how the operations associated can be eased out using VisionERA.

Financial statements are key to any company’s decision making. However considering it is a recurring process and requires loads of data handling, maintaining these financial records can be tricky. This is the reason organizations are adopting automation technologies for financial statements as well. 

If you are keen on learning about the topic, associated processes, and how VisionERA can improve financial statement analysis then read ahead…

What are Financial Statements?

Financial statements are documents utilized for assessing the finances of a company and the business activities it follows. These statements are reviewed and audited by various stakeholders such as government, stockholders, company partners, employees, etc. A financial statement gives our important information about a company that lets a stakeholder decide his/her position with the company better.

The main aim of financial statements is to provide a balance sheet that gives information on a company's liabilities, assets, investments, expenses, etc. 

Types of Financial Statements

There are primarily four types of financial statements used for analysis of business driven transactions. Those are:

Types of Financial Statements

  • Balance Sheets: Balance sheets are financial statements used for determining what a company owns and owes at a given point in time. It is a real view of assets, liabilities, and shareholder’s equity for a stakeholder to decide better.
  • Income Statements: An income statement also known as profit and loss account shows the revenues and expenses of a company for a particular period of time.
  • Cash Flow Statements: A cash flow statement as the name suggests displays the amount inflow and outflow of cash within a period of time. It signifies how viable the business is for a short period and its capability to pay bills.
  • Statements of Shareholders Equity: This financial statement is prepared to fuel the perspective of the owner of the company. It displays information about the capital shared within the stakeholders, reserves of the company, and earnings.

Key Element of a Financial Statement for its Analysis

The elements of preparing each type of financial statement is specific to the types. These are:

For Balance Sheets…

It comprises three key elements. Those are:

Assets: Assets are any amount of cash, property, material, investment, accounts receivable, etc that will benefit the company in a short and long run. These can be tangible in nature or intangible in nature. Best examples of intangible assets are trademark, goodwill, digital technology, etc.


Liabilities: Liabilities are transactions of a company that a company owes. 

Liabilities reduce the economic viability of a company. These can be accounts payable, wages, debts, long-term investment with no ROI, etc.


Shareholder’s Equity: Shareholder’s equity in a company can be calculated by subtracting assets and liabilities. It is wealth retained by a company or by the company without paying off dividends to its shareholders.

For Income Statement…

There are two elements of an Income Statement. Those are:

Revenue: Revenue can be classified into two parts i.e. operating and non-operating. Operating revenue is gained by doing core business activities such as selling products and services. On the other hand, non-operating revenue is generated by making investments done by the company in forms of rental, interest, royalties, etc.

Expenses: The cost incurred on the company while fulfilling a transaction is considered as expense. Examples of expense in a company are cost of material, depreciation of assets, administrative expenditure, etc.

For Cash Flow Statements…

The three key elements to cash flow statements are:

Operating Activities: It involves the transaction made by a company to keep it running for its operational purposes. Examples of this would be wages paid to employees, rent, equipment maintenance, etc.

Investing Activities: Any investment made by the company keeping in mind its long-term benefits comes under the investing activities umbrella. Examples include purchase of equipment, property, furniture, investments in banks or stocks, etc.

Financial Activities: These are activities performed using investors made by venture capitalists or use of cash of the shareholders. It includes debts, loans, dividends, repayment of debt etc.

For Statements of Shareholder’s Equity…

The formula for calculating shareholder’s equity can differ from company to company. Although below are four key elements that are generally considered. These are:

Initial Equity: This is the equity that the owners of the company have once a financial period is over (fiscal cycle).

Net Income: The amount of money earned by a company in a given period of time is called its net income.

Dividend: It is the money that is paid to the shareholders in terms of interest of owning the company’s stock. These are generally shared using the company's profit.

Other Sources of Income: Over time companies make investments in multiple places for long-term benefits. These assets are also included in shareholder’s equity.

Process of Preparing a Financial Statement

Financial statements are prepared once an account has been closed. The entire workflow can differ depending on the company, however, there are three basic steps for the same. These are:

Process of Preparing Financial Statements

Preparation of Trial Balance

A trial balance is nothing but the remaining balance in all the accounts at the end of the financial cycle. The cycle can vary from 1 month to a quarter to a year. 

Adjustments in Trial Balance

Once a trial balance has been prepared, its values are adjusted to bring out the most accurate data. Some of the data that is adjusted in a trial balance are wages of the employees, depreciation in investments, office supplies, etc.

Preparing the Income Statement

It is the first financial statement prepared using the trial balance. Here the revenue and the expense of a company would be mentioned for a specific period. It will determine whether the company is at profit or loss. The criteria for that is simple: if revenue is more than expense then the business is profitable and vice versa.

Creating the Balance Sheet

This step includes the creation of balance sheets. It is done by compiling all the assets and liabilities a business has at that point of time. Assets will include cash, accounts receivable, material, equipment, royalties, inventory, etc. On the other hand, liabilities will include debts, taxes, long term payments, etc.

It is essential to mention the formula ‘Assets = Liabilities + Equity” in the balance sheet.

Preparation of Owner’s Equity

This is done to consolidate the owner’s investment into the business. It combines the amount invested by the owner into a firm, salaries withdrawn, profit and loss overtime. 

VisionERA - Automation of Financial Statements

Before explaining how VisionERA could be a great help for financial statement analysis. It is important to understand what VisionERA is? So here we go…

About VisionERA: VisionERA is a SaaS based Intelligent Document Processing platform that is powered using multiple AI technologies. It offers automation of various document processing operations such as data extraction, validation, triangulation, and storage. It has the capability to process unstructured and handwritten documents too. With VisionERA, it is possible to automate entire use cases for document processing because of its custom DIY workflow feature.

Note: VisionERA is available at $0 invoicing until it starts producing results.

Before Trial Balance…

Before preparing the trial balance sheet, it is important to consolidate all the transactions into a single ledger. VisionERA can do this work without any manual intervention. It consolidates all the data from the documents uploaded to it and creates spreadsheets for the same in your preferred format.

After that all the user needs to is apply some filters in the spreadsheet itself, and will instantly start getting results.

Trial Balance Preparation and Other Financial Statements…

VisionERA can extract data from any number of sheets or documents. Using its triangulation logic feature, the user can exact their own logic and select necessary fields for extracting relevant data for other financial statements such as cash flow statement, shareholder’s equity. Etc. From there, all the necessary data is at hand to create multiple financial statements. One great thing about VisionERA is that it doesn’t make any errors in terms of data extraction and storage. It is a great advantage considering a whole lot of financial statements suffer because of the same. Also, since creation of financial statements is a recurring use case, VisionERA can be expected to handle it every time with ease providing scalability if required.

There are many other ways that VisionERA can help an organization. We understand that every company has their own flow of work, however, VisionERA sits at the center of it. It provides data that you can rely on and repurpose for different usage.

Want to see how VisionERA can help you with your financial statement preparation and analysis? Simply set up a demo with us using the CTA below or clicking here.

Get Started with your Document Automation Journey

$0 Implementation cost | $0 monthly payments -> No Risk, No Headaches

Pay only for Satisfactory Results!

Sign up for Free Trial