The Role And Benefits Of Accountancy

The Role And Benefits Of Accountancy



The Role and​ Benefits of​ Accountancy
When you​ hear the word accountancy, it​ makes you​ wonder what accountancy really means .​
Many people come to​ a​ quick conclusion​ that accountancy is​ just a​ word or​ term to​ go with accounting .​
Many people do not realize however, that accountancy is​ the life of​ any thriving business and​ is​ a​ necessity within​ any establishment .​
Once you​ understand​ what accountancy is, then you​ will realize how important of​ a​ role it​ plays in​ how we run and​ operate our business finances .​
We will go over some of​ the basic aspects of​ accountancy.
The core of​ accountancy is​ maintaining extremely accurate records of​ any and​ all aspects of​ a​ business and​ how it​ earns and​ spends money .​
you​ must maintain​ multiple types of​ records to​ account for​ every aspect of​ your​ business, which is​ why accountancy can become a​ very complicated process but is​ necessary .​
Different parts of​ these separate records are your​ accounts receivable and​ payable, your​ current inventory, all of​ your​ sales orders for​ your​ current tax period as​ well as​ an​ accurate database of​ your​ past sales records and​ your​ purchase orders .​
you​ must also maintain​ a​ accurate account of​ your​ bank statements and​ a​ backup record to​ cross reference all of​ your​ records to​ make sure they are accurate and​ up to​ date .​
this​ is​ only one part of​ accountancy.
There is​ another aspect of​ accountancy which involves knowing what to​ list each transaction​ as .​
Now in​ accountancy you​ need to​ be able to​ define what are your​ assets, knowing how to​ identify your​ liabilities, being able to​ show your​ expenses as​ well as​ you​ positive income .​
in​ order to​ do this​ properly, you​ must know how to​ define these different terms and​ what they do and​ do not apply to .​
this​ can make what some would view a​ simple task of​ maintaining proper records even more complicated.
These two parts of​ accountancy are extremely important, not only for​ tax purposes, but also for​ banking reasons as​ well as​ audits that can arise form businesses that you​ interact with .​
Accountancy also provides several benefits to​ businesses that use accountancy properly .​
The biggest and​ most obvious benefit of​ accountancy is​ being able to​ pay your​ taxes accurately and​ on​ time .​
However, this​ is​ a​ small benefit compared to​ other vital benefits that accountancy brings .​
Accountancy can help you​ keep a​ accurate spending balance for​ your​ bank accounts, as​ well as​ give detailed reports of​ of​ all of​ your​ expenses and​ cash flow which is​ necessary for​ audits .​
One benefit that you​ can gain​ from accountancy, is​ maintaining accurate expenses and​ being able to​ reflect that in​ your​ products prices .​
if​ you​ do not accurately maintain​ records of​ your​ costs, then you​ could accidentally under price your​ products and​ actually lose money .​
Accountancy will give you​ a​ detailed projection​ of​ your​ costs and​ accurately show you​ your​ profit margin​ that you​ can compare with your​ labor and​ other expenses .​

Many businesses suffer financially because they do not keep accurate records for​ every aspect of​ their business, which is​ why accountancy plays a​ very strong and​ important role in​ a​ business .​
Without accountancy, a​ business would suffer and​ eventually fail as​ it​ would have no records or​ projections to​ help it​ progress .​




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