The objective of maintaining books of accounts is to obtain more information about the financial standings of the business.
The 14 Basic Advantages Of Accounting Services are:
Maintenance of permanent Business records: Basically business will have a large number of transactions. It helps in recording all the financial transactions related to that respective financial year.
An Order and Systematic: Accounting is maintaining a systematic way of presenting business transactions in books of accounts. It is a complete process of representation of business transactions. Accounting helps keep a record and analysis of each and every business transaction.
Decision making: The primary function of management is decision making. Accounting helps the management to make better decisions with an increase in sales, respect to the selling price (SP), deduction of cost, etc.
Business Valuation: Accounting helps in attaining the correct business valuation. The accounting services also help to depict the balance sheet and this will be used to determine the purchase price.
Helps in Raising loans: Business owners take loans in order to expand their business. Financial institutions provide loans on the basis of the profitability of the business. This can be measured by having a look at the accounts of the company.
Evidence in court: Accounting helps to maintain all business transactions and are recorded in the books, and the records can be used as evidence in the court of law.
Complying with law: When you set up a business, you will have to deal with various government bodies like the GST, income tax, etc. Accounting helps in the filing of various returns with these government bodies.
Preparation of Financial statements: If there is a proper recording of transactions maintained, Financial statements like Profit and loss account, Balance Sheet, Trading, etc. can be prepared easily.
Comparison of Results: At the end of the financial year, it helps in analyzing the financial results of the entity by having the year to year comparison.
Audits: It helps in securing Audit certificates issued by the auditor on the accounts, which proves that there are no irregularities in the company business.
Effective management: Accounting provides feedback to the management about the financial status of the organization. This helps the management to make better business decisions and also helps in controlling different activities of the business.
Cost control: It helps in efficient cost controlling by identifying and reducing business expenses. It also increases profits that help in the budgeting process.
Inter and Intra comparison Accounts: Intercomparison accounts is nothing but a comparison of accounts made between two different companies for the same period. The comparison made between two different periods for the same company is called intra comparison.
Prevention of Errors, Frauds, and forgery: Accounting also helps in taking the timely steps for the prevention and detection of fraud and errors.
Accounting helps in the overall growth of the business and also keeps the track of the financial transactions of the business. Accounting is the best way to systematically analyze the goals, growth, and shortcomings of business & LLP Registration India.