What Accounting Services Can Do For Any Business?
Accounting is mainly the practice of maintaining the financial records of any company. This service also summarizes all the records to compile the financial statements of any organization. Accountant services are really important for recording all the financial transactions of businesses. Without the proper accounting services, it is impossible to find out the financial health of the businesses to the stakeholders. Besides, accounting is also pivotal for different aspects and this plays a major role in preparing the compiled statements of finance.
Here are the things what an accountant service can do for any business:
- Information to the investors: Both financial and accounts statements represent a company in front of different stake holders like creditors, investors, government, debtors, employees and customers. Accounts mainly work as the representation to all the stakeholders, who are impacted directly by the financial position of any company.
- Banks and lenders: Both the banks and lenders need to consider the financial health of any company depending on which the loans are granted, considering the fact that the revenue earning ability of that company. This is completely impossible without a proper accounting system. Earlier records of taxes paid, book profits recorded, liabilities and assets of that company are studied carefully before granting the specific amount to the management.
- Report profits: Every business mainly operates to make profits. Statutory taxes like income tax on profits are needed to be paid that are mandatory by the businesses. And accounting is important to ascertain that profit amount.
- Plan the budget: Budgets are really beneficial for the businesses to plan strategies, for capital expenditure or to save cash for the expansion plans. Besides, this also sets some warning signals if the expenditure exceeds unusually. Accounting also ensures proper maintenance of the historical records that forms the basis of preparing and planning budgets.
As a whole, without proper accounting, the businesses will be a ship without radar. So, both small and big businesses need to maintain accounts to keep a tab on the present financial position that is the main motive of any company. In some cases, managements of companies can engage them in dressing the accounts up with the intention of defrauding all the stakeholders. This is also the reason why the law stipulates obligatory auditing of the accounts for all the businesses that are exceeding a certain amount of turnover, which often differs according to the terms and conditions applicable for that specific nation.