Businesses don’t survive unless they take in more money than they put out. Accurate accounting lets business owners know whether or not that’s happening and it does much more! Here are 7 reasons why accurate accounting in business is so important:
1. Sound accounting practices give business managers and owners an accurate financial picture of just how well they’re doing. Accounting enables business owners to review how their company is performing year-over-year and determine whether things are improving or getting worse.
2. Good record-keeping allows businesses to better manage their accounts. It helps them understand what they owe (payables) and what they can expect for income (receivables) so they can pay and be paid on time.
3. Accurate accounting helps businesses take advantage of prompt payment discounts and avoid late fees and penalties. It’s not enough to know what amount to pay to whom; businesses also need to know when those payments are due!
4. Well-organized records enable businesses to answer financial questions quickly and accurately. Who are their best clients? What are their best-selling products? Without accurate accounting, the answers to these important questions can remain a mystery.
5. Keeping accurate accounting makes the job for accountants and tax preparers much easier and can save businesses money. The more work an accountant needs to do for a business come April 15th, the more that accountant is going to charge.
6. Accurate accounting also ensures that businesses pay—and don’t overpay—taxes that are due in a timely manner. Among the many taxes a business might be responsible for are excise, income, payroll, and sales taxes.
7. Sound accounting practices show banks and investors that a business is worthy and takes its finances seriously! An accurate financial picture that includes financial reports, balance sheets, income statements and a statement of profit and loss are what institutions look for when they’re considering lending businesses money.
If you’d like a career in business, you’ll need to understand the importance of accurate accounting. At Career Quest Learning Centers, our Associate of Applied Science Degree in Business Administration will offer you career training in the fundamentals of business, including the management and accounting skills you’ll need to work in a modern office. To find out more, call us at 877-481-4930 or 877-365-8144 today.