What are the roles of accounting in doing business? Isn’t accounting a backbone of a business? Without it, your business can run without a clear direction. Your business may currently get increasing profits, but without clear and definite financial management, which is regulated in the field of accounting, it is only a matter of waiting for the results of these profits to leave nothing useful for your business.
It can be said that accounting “disciplines” your business finances so that it is always neatly organized, both in terms of income, expenses, losses, profits, and so on. However, what are the roles of accounting in business?
Here are 4 Roles of Accounting in Your Business
Providing Information and Answers Related to Finance
The most basic role of accounting in business, of course, is its ability to provide various information and answers related to all kinds of financial activities. All financial-related data will be recorded in the accounting system, making it easier for you and your employees to measure the condition of the company. For that, it is better if you compile books and regularly update the data. This will be easier to do if you use special software such as Sleekr Accounting that has implemented a cloud system . That way, every employee or accounting team can access accounting data in real time whenever and wherever they are.
Financial Controlling and Controlling Tool
Through accounting, you can find out all financial related data. From this data, what information do you get? Do you find that company profits have increased in recent years? Or has it actually decreased? Have all clients made payments on time? How much balance do you have now? This information indirectly places accounting as a means of controlling and controlling finance. By identifying the financial information you have obtained, you can evaluate or assess the performance of your business so far.
Helping Stakeholders Make Decisions
Thanks to the results of identification and evaluation of financial information, stakeholders or shareholders can make decisions. This makes a lot of sense given that stakeholders cannot invest without up-to-date and accurate financial information . In this case, it is the accountant who prepares all the related information . More importantly, accountants must also ensure that stakeholders understand the financial data that the company provides. Both parties must work together to utilize financial information to deal with various problems in business.
Dealing with Third Parties
From the various explanations above, there is one point that needs to be highlighted, that accounting does not always relate to the internal sphere of the company, but also to third parties outside the company. Stakeholders may be one of them. However, accounting, more precisely accountants, can be a bridge to make deals with vendors or other third parties. Based on the company’s financial data, the accountant can decide whether the price set is reasonable or not. Not only that, an accountant can also be a liaison between the company and the government to pay taxes and auditors.
Just thinking about finances is not enough to guarantee the company’s future. You must also be able to identify and analyze the financial data obtained, then process it to be used as a basis for further decision making.