Accounting is important in business to provide a general overview of how the business is doing financially. Understanding accounting greatly helps the business owner make profitable decisions for the company.
Profit and Loss
- Accounting allows the business owner to see where profit is being made and where losses are occurring, helping him know where improvements need to be made.
Cash Flow
- Through accounting, the business owner can see where money is being spent; this allows for better understanding and budgeting of money.
Balance Sheet
- Seeing if profits are large enough to overcome expenses is tantamount in business; this information defines the success of the operation.
Financial Decisions
- With accounting, the business owner can make financial decisions that will be most lucrative in the long run.
Taxes and Audits
- All financial records are kept in order thanks to accounting; this allows audit & taxes to be executed easily and precisely at the end of the year.
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