ACCOUNTING: A TOOL FOR DECISION MAKING
by Pankaj Kumar |April 29, 2019
Accounting is said to be the base for the managerial decision making. It allows the management to keep the track record of every single transaction from its posting to last, and where it will effect which financial statements at the end of the time period. The growth and expansion of the firm is wholly depending on the accounting process and its end information.
Mainly for the small scale business their dependence on the financials is very high on the financials of accounting. They also want to grow and expand their market and business firm. It is most important for them to make sure regarding their firm policies and procedures. Growth is always a dream for any owner of the firm. But the growth must be holistic and can be in every aspect of the business. It is very necessary that the accounts must view the accurate and reliable picture of the firm so that the decisions made from the accounting should not suffer from any kind of biasness.
In the accounting and bookkeeping outsourcing fields, the business firm delegates their accounting process to the outsource companies. They accuracy of accounts depends on the outsourcing firm making their accounts. Usually the outsourcing companies are dealing their clients making their accounting processes easy and accurate with the help of QuickBooks accounting software. This ensures the properly managed and accessed data transform into the financial statement and final reports.
In the outsourcing fields, the decision making is wholly depending on the accounts that are made by the outsourcing partner of the firm. And it is very necessary that the accountant employed by the outsourcing company must have specialized skills and expertise in accounting principles and standards.
When these final reports are reached to the management of the firm, they are liable to make the future forecast on the basis of present performance of the company. To go with the flow in the market, it is very necessary that proper planning is done of operating the business in the future.
There are several aspects in the organization which are beneficial by the way of making the accurate and reliable accounts. The decision making can be done on these aspects with the help of accounting. The following are some concerns of business in which the accounting is helpful in their decision making:
Budgeting: It will always be beneficial for you if you set the appropriate budget for every concern in the business. This will leads to the prior estimation and preparing for the same. As for the expenses, when you set the fixed budget you will be aware that you expenses will not exceed further from this limit.
Cost Estimation: Profit and Loss Account will provide you with the clear picture of your expenses and income incurred by you in the previous period. And on the base of this, you can view the estimation for the future, that how much expense you have to bear in the coming time period.
Financing Decisions: Every business requires finance at some point in the business. Finance is said to the blood for any organization. The end accounting product of financial process i.e financial reports are beneficial in deciding the best finance options suitable for the business firm.
Investment Decisions: It is vital for any business firm to make investment in other investment institutions or the securities for their own profit. There are several options for investing money and they have to choose the best out of them. The past records are helpful in deciding the profitable mode for the firm.
Allocation of Resources: The financial reports help the business firms to allocate the existing resources in the meticulous way, in which the maximum output can be archived from them. It ensures the optimum utilization of the existing resources. Resources can be: cash, employees, assets or any other which will helpful in better functioning of the business.
Better Planning and Controlling: Variance analysis is helpful in comparing the past and present performance with the estimated of budgeted figures. The lack in action plan can be placed with naked eyes. And for the better planning and controlling measures can be taken for the future concern.
Forecasting: It is the way of thinking ahead for the future about the business operations, taking into consideration the existing performance of the company. Management can predict the future expenses or revenues on the estimation basis.
Globalbookkeeping.net will make your search complete of finding a suitable accounting and bookkeeping outsourcing partner for your firm, which will help you not only in maintain your accounts also in better decision making regarding every single aspect of your firm. We can help you to grow potentially. We have been using the QuickBooks Accounting Software from last 8 and more years.
We have a team of highly qualified professionals of accountancy. We have the lowest operation costs for all our services and we take pride in that. We here only for the purpose of providing you the benefit of managing your funds, that will help you in staying in profit for the longer time.
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