Wednesday, 19 January 2022

The need and importance of accounting in the corporate world

The need and importance of Accounting in Today's World - Businessandfinance  Blog

Accounting was never considered important until the exchange of goods and trade started. Man started feeling the need of keeping a record of all his sales against all his expenditure. Accounting in a way enhances one’s economic and social upliftment.

Accounting is spoken about a lot in business. Systematic accounting helps in understanding whether a particular business is doing well or not. Several companies maintain a balance sheet. This balance sheet helps one to understand the position of his business at a given point of time.

Who is an accountant?

An accountant is a person who practices accountancy as a profession. Every company appoints an accountant in Pasadena. It is an accountant’s job to create the economic report of the company. Every company appoints this professional who engages himself continuously in the balance sheet and trade of the company.

What is the work of an accountant?

Management of money, banking, stocks, investments, credit and debit is done by an accountant. An accountant may either work for a client or under the company that appoints him. Every accountant in Pasadena is made to keep all financial reports extremely confidential. Likewise, every company refrains from sharing such personal data with anyone.

Before appointing an accountant:

It is highly risky to hand over your trade files to an unknown person. Finding a trustworthy accountant would be quite an attack but, as long as the company is safe, the owner would keep trying. One must make sure the appointed accountant has a clean history and is only interested in the job he is looking for. It is very difficult to trust someone these days. Hence, one must personally talk to the person before appointing him and also with someone who he has worked with in the past. 

It is the accountant who estimates the average annual budget based on the financial reports that he has summarized. Every decision that is related to money is taken forward only after the green signaling of the accountant of the following company. An accountant can also act as a financial advisor for the company. It is this person who advises the owner on whether to take a particular business step or not. This is because the accountant knows the financial status of the company and is capable of deciding whether the company can take a certain expense or not. 

Certain experienced accountants know when a particular financial risk can be taken and when, not. Even if the company is at a loss, due to their experience they can estimate that by taking this risk, there is a possibility of a positive boost in profit. 

However, if you have a small business or a household business, there is no need for you to appoint an accountant. Small records can be maintained manually by us. Accounting of a small business is not a huge task and can be managed with ease. Only huge companies with huge transactions require such professionals. Basics of accounting for a small business can be learnt even at home.

Leave a Reply

Your email address will not be published. Required fields are marked *