Is ACCOUNTING

just for COMPLIANCE?

Accounting for Taxation purposes

Businesses need to provide information about profits and losses to determine

the tax payable.

Discrepancies in your records will end up in faulty tax returns, which in turn

will lead to fines and penalties.

Accounting will help business owners to ensure the information is accurate and

presented in a professional manner.

However, Taxation and Compliance

are NOT the only reasons for Accounting playing a vital role

in businesses! It is also important ……..

To Determine Profitability

Accounting is the predominant way a company determines its profitability.

High Revenue High ProfitsAccounting will provide a greater understanding of areas where the business makes profit and where costs can be

cut. It will also give business owners a better grasp of the

progress that they make from year to year.

To Track Cash Flow

It is absolutely important for businesses to track the spending and it can only be done with accurate financial

records.

There are plenty of businesses which work hard at growing the business but fail to track the cash flow, leading to an

unexpected halt in its operations.

To Budget Expenses

A budget outlines the expenditures needed for various aspects of the business such as employment and

marketing.Accounting information will allow us to provide a

more accurate estimate in the budget.Sticking to a budget will help businesses to avoid

wasting capital on non-essential items.

To Forecast Financial Estimates

Banks, lenders and investors usually require financial forecasts relating to the new venture, especially if it is a

young venture.

The accounting information is heavily relied upon by lenders or investors to ensure the entrepreneur has an accurate and

reliable picture of financial expectations.

A financial forecast is needed by entrepreneurs who are seeking for external financing.

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