Lamar Van Dusen Importance of Accounting

You know you have to do it unless you want IRS penalties and audits. You wouldn't be able to determine the financial health of your company without it. Your business decisions would be a crapshoot as per Lamar Van Dusen. Of course, we're talking about accounting. So, how can accounting assist you to defend your company, assess its health, and make decisions? In a nutshell, why is accounting so crucial in the corporate world? Let's see how many ways there are. Accounting and business go together like peanut butter and jelly. One cannot exist without the other. But why is that? Take a look at some of the reasons why you require accounting services in the list below.

• Keeps Organized

You wouldn't know how much money your company has made if you didn't keep track of it. It's easy to lose track of how much money you've spent. You also wouldn't recall how your present profit or loss compares to previous quarters' as told by Lamar Van. Which of your consumers hasn't paid you yet? What debts have you not yet paid? You (should) know exactly how much your accounts receivable and payable are if you use accrual accounting. In a nutshell, accounting shows you exactly what your company has been up to financially. It helps you stay organized so you can complete your tax return correctly and lawfully.

• Fills up Tax Return Claims

Many small business owners dread paying taxes, especially if they don't know where to begin. This is where the value of accounting in business is realized. Gathering financial documents is the first step in submitting your tax return. You won't be able to enter the correct amounts into your return unless you have these records (for example, financial statements) as observed by Lamar Van Dusen. But, because we mentioned it earlier, we'll go on to the second element of accounting and tax returns: the dreaded audit. What happens if you're audited by the IRS? You must demonstrate that you have done your homework and have the proper accounting information to back up your return.

• Holds Accountable

You know how crucial it is to demonstrate rather than tell if you have shareholders in your small business. Accounting is responsible for this. Your shareholders hold you responsible for the company's performance. They can use your accounting data to track the growth and success of your company. Accounting, on the other hand, can assist you in holding your staff accountable. Make sure you're up to speed on items like bank statement reconciliation and trial balances. You'll be able to detect fraudulent conduct before it has a significant impact on your company.

• Supports in Making Decisions

Should you invest in a brand-new, top-of-the-line printer for your office? That depends on your financial situation. So, how about your outgoings? Is there anything you can cut to improve the bottom line of your company? That depends on how much you're spending and what you're spending it on. To answer questions like these, you'll need to look at data, specifically your accounting records. Accounting can assist you in making judgments that will help you avoid frequent business blunders such as Overspending, Underspending, and Plateauing.

• Important for Getting Loans and Investments

Before investing in you or lending you money, investors, and lenders need to discover a little bit about you. And that entails looking around in your company's bookkeeping records. Generally, you must present your financial statements to investors and lenders. They will be able to learn about your profitability this way. Your financial statements, financial predictions, and profitability claims will be inaccurate and unsupported if your accounting books are disorganized.

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