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Role of finance and accounting in business

Role of finance & accounting in business - finance and accounting functions

Accounting and finance play an important role in the management of any business. Businesses are operated on money, so it is very important to control money in order to have a hold on the business. An accountant of a company helps to manage income and expenses and also the flow of money and thereby direct the course of your business.

Also Read: What Is the Basic Function of Accounting in Business?

Finance and Accounting Functions

Creating budgets and financial records

By understanding the flow of money through your business with proper accounting practices, you can begin budgeting. In budgeting, you anticipate revenues and use that knowledge to make decisions about how to maintain and grow your business. They help to culminate good financial record keeping.

Analyzing financial performance

It is very important to analyze the past performance of the company in order to improve the present condition. When you review the financial statement of a company, you can see not only where the money went, but what good it did in the long run.

Developing business strategy

The goal of most companies is to make a profit, but the road to get there is one you have to build yourself. The company comprises of financial data from within your own company, which acts as one of the chief tools you have in understanding the economic landscape of the market you are operating in.

Helps to set budgets

A business budget is more than a list of projected income and expenses. A comprehensive master budget starts with income and expenses projections, then creates different reports to help you operate.

Analyzing costs of a business

Accounts in business are effective when it helps you understand what it costs to make and sell your product in ways that let you see how different sales volumes will affect your profit margins.

It helps in evaluating the performance of the business

Your financial records reflect the results of operations as well as the financial position of your small business or corporations. In other words, they help you understand what’s going on with the business financially.

It ensures statutory compliance

There can be a constant update of laws and regulations, but proper accounting systems and processes will help you ensure statutory compliance when it comes to your business. The accounting function will ensure that liabilities such as sales tax VAT, income tax are appropriately addressed.

It helps in filing a financial statement

Financial statements have to be filed by the businesses with the registrar of companies. Stock exchanges are the listed entities that are required to file them, as well as for direct and indirect tax filing purposes.

Safeguarding assets through internal control

Accountants and finance professionals play a vital role in helping to protect the assets of a company. They do this by designing and implementing viable internal controls and management controls.

Inventory management and control

Inventory control and management are within the preview of the accounting and finance department. No other department is better equipped to manage and control the inventory of small businesses.

Preparation of financial statements

It is the director’s legal responsibility of a company to prepare the financial statements, the finance and accounting department is always called upon to prepare the financial statement.

Accounting services in UAE

Accounting services are very essential for a business. Outsourcing your accounting services to Farahat and co for expert advice would help in strategist the future course of the business. Our experienced accountants can work with any accounting system and integrate it with your overall business accounting process. For any accounting services, contact us for further consultation

what do finance and accounting do?

A financial counting who is part of the accounting department at an organization often keeps records of financial statements supervises tax payments and maintains accounts. Accounts related to finance may work extensively with technology to compute, maintain and classify financial records.

How does accounting affect business?

Accountants play an important role in the business by handling the company’s financial records. Managers, creditors, and investors depend on accurate accounting information to make good decisions.

Also Read: Difference Between Commercial License and Professional License

Why finance and accounting are important?

Finance and Accounting help in the management of any business. By properly accounting for your company income expenses, you can manage the flow of money and thereby direct the course of your business.

Why is accounting important for business?

Accountants have an essential role in running a business because it helps you track income and expenditure, ensure statutory compliance and provide investors, management and government and quantities financial information which can be used in making a business decision.