Role of Accounting in Business | Outsourcing CPA blog

Accounting is the process of recording, classifying, summarizing, reporting and analyzing financial transactions. It is said to be the?language of business. Accounting plays a vital role in any business operations. It helps in tracking financial transactions of a business.

Accounting helps people in identifying how, when and where should they invest their money. This also helps business owner determine if they are doing well in their business.

It is a systematic way in which all the transactions of the company are recorded. Accounting records must be accurate and must be kept in chronological order. With this, you can track all your earnings and expenditures. You can also determine in which part are you spending too much or if not enough is being spent on other parts of your business.?These records can be used as basis for future business plans of a company.

An accurate record also helps in preventing and avoiding fraud. You should regularly maintain and review all your accounts just to make sure that there are no malpractices happening in your company. It also helps in preparing financial statements. These statements help to secure investors and shareholders of the company.

Accounting records also help you with your taxation duty every year. This is a main obligation a company must comply to. You can file tax return using all the accounting information of your business. Paying proper taxes is important, penalties are given to those who are not paying the right amount of tax.

Accounting also helps in decision making, whether short or long term. It gives you a clear view on where your business is heading. Keeping everything in order is the key to success.

This entry was posted in Accounting Info., Business Tips and tagged accounting, business, company, decision making, financial statements, fraud, importance, plans, records, success, tax, transactions. Bookmark the permalink.

Source: http://www.outsourcingcpa.com/blog/2012/08/role-accounting-business/

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