It is really important that the organization to keep accurate and up to date accounting records. Business accounting help the owners of organization to manage their affairs properly and enable outside stakeholders to assess how well the business is performing. There are some reasons to keep good accounting. Enables you to manage your business and make it grow, because no one knows your business better than you do, but reliable information can only be extracted from the records you keep. If you don't have good records, it's much harder to make good decisions. Make it easy to prepare management accounts.
Management account helps you to know how your business is performing, with management accounts you can compare one period with another, his year with previous year. Keep good accounting makes you easier to get a bank loan or overdraft. Banks like it when you seek an overdraft for the right reason and at the right time. In a business, the accounting department provides accounting service and financial support to the business. Accounting consists in reporting every financial information regarding to this business performance, how much the funds is flowing in and out of a company.
Businesses should recording of financial transactions because it will help the owners to make decisions related to the management of the business. The management of the business is really important, the business needs to set targets and in order to reach them everything needs to be well planned, organized and monitored all the details. Managing the business appropriately will lead the business to make profits and success, once the business succeed everyone will be more motivated to work harder and that will help the business to expand and achieve all their targets.
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It is really important to have the ability to control the business's accounts, because if accurate records of transactions are maintained and activity closely monitored, then actions can be taken to control he balance between money flowing in and out of the business. For example, if it appeared that expenses were creeping up but sales staying the same, then the owner could look for ways to control or cut costs. Monitor activity consists in keeping up to date every information about the business performance and helps to find if there is any problem in the business.
The aim of monitor activity is to ensure that all the goals set by the business such as profit and customers satisfaction are met. Organizations must record all their transactions, documents such as bills, bank statements and receipts must be kept as evidence. One of the benefits of keeping accurate record of every transaction made in an organization is that it helps the business to maintain financial control in order to increase their profit.
Measurement of financial performance is when a company makes a full balance of how much profit the business is making and how much the business is losing. Overall a financial measurement is the full evaluation of the business. Gross profit it's one way of measuring the business profitability because it indicates if the business management is being done efficiently. Net profit it's what companies use to find out if whether or not the business is being success or not, net profit is the balance of all the money remaining after paying all the expenses.
It is very important for a business to account know how much is it's the value owed to and by the business so that they can balance the profit of the company. Value owed by the company are those assets that the business has not yet paid for such as goods that have been delivered to the company or unpaid bills, in the other hand the value owed to the business are those who the company has not received the money for them yet such as amounts due to be received from customers for services supplied.
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Business Accounting Essay. (2018, Apr 30). Retrieved from https://phdessay.com/business-accounting-essay/