Why is accounting important

In simple terms, accounting is the method of recording business and financial transactions and then analysing, verifying, and reporting the results. Some firms specialise in certain areas such as cash flow, payroll, reporting and management accounts. It is the process of collecting the businesses financial information and manipulating it to create clear and understandable for all business owners, stakeholders or shareholders.

Accounting plays a large part of any business, however it’s importance can often be overlooked. Good accounting products the necessary information in fast effective ways and it is hugely important to make use of when planning and making decisions about the future and the growth a business owner wishes to make.

Accounting is not only useful for future decision, it also provides a vital role in the day-to-day running of business because it delivers details in daily cashflow, income, outgoings, expenditures and more. Accounting is important for offering control, stability and accountability for routine, daily decision making.

Here are just a few of the reasons why it is important for your business, big or small!

1. Stay organised

If your accounts and records are messy and hard to understand it can have a negative impact on your business’ reputation. A good accounting firm will keep your accounting up to date and organised.

2. Be within the letter of the law

Not only is accounting important for business reasons, good processes and systems keep your business in good legal standing. Accounts will know the right rules to follow and help you be ready for any eventualities.

3. Complex taxes

You can’t be an expert at everything, accounting has a number of complex systems and rules that need following, especially when it comes to taxes. So, having the right firm on board is hugely important for your business.

4. Save time

If you don’t have any systems in place for your accounts, you will end up spending hours and hours sifting through records, trying to make sense of data that isn’t well organised. Having a good accounting firm in your corner makes the money-managing process much smoother and faster.

5. Save money

During tax season it can be difficult to know where to make the right deductions. An accountant will be able to use the organised system, and can also point out deductibles you might not have known about, which might be hugely important for the financial health of your business.