5 Reasons Why Accounting Is Important To A Business
You started the business because you were passionate about a product or service. You haven’t started a business to do the non-fun part of accounting. This isn’t to scare you, but not starting off on the right foot with proper accounting procedures can spell disaster for businesses. According to CPA Australia, some businesses fail because of poor financial management, while others have poor or non-existent accounting records.
Accounting and bookkeeping not only help in recording financial information. Both processes help to remain compliant with the Australian Taxation Office (ATO) and ASIC (the government regulator of companies and businesses).
5 reasons why accounting is so important to small Australian businesses:
1) Bookkeeping helps in tax preparation
GST applies to all small businesses in Australia. Bookkeeping services consider all calculations and reconciliations around input credits and GST charges to ensure that you file your GST correctly. An accountant helps your accountant prepare GST.
With proper bookkeeping, your quarterly GST filings are filed in a timely manner. It also ensures that your company does not incur late or incorrect filing penalties.
2) Accounting tracks the performance of the business
Keeping track of business performance and the health of your business is as important as compliance. Accounting gives you a clear understanding of business profitability (is your business making money?) and financial position (what are your cash and loan balances?).
3) Bookkeeping helps in budgeting
Bookkeeping helps you plan your expenses and allocate them to expected payments. The process allows you to identify the profit and loss of customers, products and services in your business. This can help you plan your resources and expenses better.
4) Accounting helps in making correct business estimates
Your forecasting skills increase with accounting. You know how much business has progressed over time. This goes a long way in making planning for the future of the business a lot easier.
5) Accounting gives you peace of mind
If you do not want the stress of incomplete books to give you sleepless nights, then keep your books updated. Intelligently managed Bookkeeping services provide peace of mind and take a lot of the work out of you.
Alternatively, you have the opportunity to embark on a journey of self-improvement where you can delve into essential subjects such as Financial Management and Budgeting. In addition, you will gain valuable insights into maintaining accurate payroll records, managing payroll data effectively, and understanding the intricacies of maintaining records for taxation purposes. To embark on this enriching educational experience, I encourage you to visit ww.edna.edu.au/ and enroll in one of their esteemed distance-learning classes.