The fiscal information of your organization is the final measure of the operation of your enterprise.
The time-honored way of coming in the accurate financial advice of your company is via bookkeeping. Let us talk about the importance of the procedure of accounting for financial info. You can get business financial accounting service from the best CPA firm.
The Significance of Accounting
The rationale behind accounting is to meet the following objectives:
• Accounting is essential to determine the current standing of your business in the market.
• The financial information derived through accounting forms the basis for a sound, short or long-term, economic planning for your organization.
• The reports prepared serve as a testimony of your firm's performance for your clients, investors, creditors, and bodies like tax authorities and financial institutions.
The Process of Accounting
The process of accounting is triggered as soon as a monetary transaction occurs.
It ends when the accounting books are closed at the end of a particular reporting period. An accounting cycle can be elucidated step by step as discussed below.
The following steps are executed all through the accounting period:
- Identification of a transaction.
- An event is identified as a fiscal deal and the relevant source document like a proof of purchase or a purchase order is generated.
- The transaction is quantified, the accounts affected are identified and it is determined whether it is a debit or a credit.