This is the capturing, maintaining and providing a company s financial information for decision making. When Bookkeeping Temecula CA, many benefits to it. They include compliance to a country s compliance laws, availability of ready information for decision making, cutting cost, preventing fraud and also for making long term plans of the company.
The functions involves very many steps which should be done by different people. Example the one initiating an order should not be the one doing the accounting entries and at the same time authorizing the transaction. This minimizes chances of fraud. Advantages of keeping books of accounts are
Ensures that fraud is identified and dealt with. An effective book keeping function will capture all the transaction and activities of the organization. This means that if a very awkward transaction is captured, or the books of accounts do not balance then there may be chances of fraud. This must be investigated further to unearth fraud and then disciplinary and corrective measures taken. This also makes people conscious if the activities in terms of finance.
Decision making by management becomes easy. This is because there is ready information from accounting entries for reference. Decisions that involves money should be done on a basis of what is available in the bank, otherwise irrational decisions made on the basis of gut feeling can lead to losses. Decision making can be for future or for the present example whether to purchase now or then, whether to expect 100% collection rate or not, decisions associated with the levels of provisions.
It helps the organization identify areas that need to improve in terms of cutting costs. Without the financial information, the organization would not know which item drains their finances.
For compliance purposes, company s must keep there books of accounts. When a company does its tax returns, they would need information for book keeping function. It is important that these information is accurate and true. This is validated by a certified accountant who appends their signature that the accounts are true and fair picture
For planning purposes. The Book keeping function helps in coming up with budgets from past data. This is key so that the company would not run out of cash in the near future. It also helps companies know the priorities in terms of purchases, which suppliers are falling due, expenses to pay and also money expected so that planning can be done accordingly.
This function can assist in correcting misstatements of figures. Reconciliation is an activity that helps look for these mistakes and also reasons for the mistakes. Proper book keeping can assist in correcting the mistakes from the source documents. Understatement and overstament of facts can lead to wrong decision making.
this function must be done by a qualified accountant because there are set standard of accounting that must be followed. The function is also guided by principles and assertions by the management.
The functions involves very many steps which should be done by different people. Example the one initiating an order should not be the one doing the accounting entries and at the same time authorizing the transaction. This minimizes chances of fraud. Advantages of keeping books of accounts are
Ensures that fraud is identified and dealt with. An effective book keeping function will capture all the transaction and activities of the organization. This means that if a very awkward transaction is captured, or the books of accounts do not balance then there may be chances of fraud. This must be investigated further to unearth fraud and then disciplinary and corrective measures taken. This also makes people conscious if the activities in terms of finance.
Decision making by management becomes easy. This is because there is ready information from accounting entries for reference. Decisions that involves money should be done on a basis of what is available in the bank, otherwise irrational decisions made on the basis of gut feeling can lead to losses. Decision making can be for future or for the present example whether to purchase now or then, whether to expect 100% collection rate or not, decisions associated with the levels of provisions.
It helps the organization identify areas that need to improve in terms of cutting costs. Without the financial information, the organization would not know which item drains their finances.
For compliance purposes, company s must keep there books of accounts. When a company does its tax returns, they would need information for book keeping function. It is important that these information is accurate and true. This is validated by a certified accountant who appends their signature that the accounts are true and fair picture
For planning purposes. The Book keeping function helps in coming up with budgets from past data. This is key so that the company would not run out of cash in the near future. It also helps companies know the priorities in terms of purchases, which suppliers are falling due, expenses to pay and also money expected so that planning can be done accordingly.
This function can assist in correcting misstatements of figures. Reconciliation is an activity that helps look for these mistakes and also reasons for the mistakes. Proper book keeping can assist in correcting the mistakes from the source documents. Understatement and overstament of facts can lead to wrong decision making.
this function must be done by a qualified accountant because there are set standard of accounting that must be followed. The function is also guided by principles and assertions by the management.
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