The Role Of Accounting And Finance In Business

Customer is King and so they need to be taken care of very well. Customer service is the factor that keeps your customers coming back. Due to the main focus on core processors, many companies miss out on some of their best customers due to the lack of personalized care to each individual customer. Many of them have very simple complaints that can be easily solved by just a phone call but if your company has no person assigned to make that phone call, you will have a very dissatisfied customer who is going to talk about it whenever he goes. To avoid such mistakes, give customer service to the experts as they have trained professionals with high people management and marketing skills. Accounting and finance is a separate business function that is responsible for the management of a company‘s income, expenses and investments. The main objective of a business is to increase the wealth of its owners and this can be done by managing money. Companies run on money and if it isn’t controlled and maintained, it will have direct consequences on the share price. So here is the role of accounting and finance in business.

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Obeying the law

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Companies are governed by law and the accounting processes have to abide by the stated law. Good accounting practices will keep your company out of trouble especially with financial reporting, cheap tax return in Brisbane, corporate governance etc. Poor accounting practices might not report true financial performance results and this could have serious legal implications. For example, if your profit is understated, the taxes paid will be lower than it should be and your company will be penalized for tax evasion. It is vital that you maintain proper records so that if you are ever under legal scrutiny, you have clear evidence to present to the officers.

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Creating budgets

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Budgeting is estimating your future incomes and expenses so that business plans can be executed.  Budgets are made by looking at previous financial records and hence it is vital that accurate bookkeeping services are done. They are known as the blueprints and are used to guide organization to achieve its goals. Budgeting takes a lot of analysis and are used ultimately to gain stability and success, so the accounting professionals have a big responsibility in putting together some solid budgets.

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Analyzing financial performance

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Financial key performance indicators are one of the most used performance evaluation criteria of a business organization. A business can be improved if it can learn from the past so for this it needs accurate past financial records. By analyzing these records you can find the expenses, what good it did for the business, the value addition in operations etc. At the end of the day, your investors will be looking at your annual report to have a look at the numbers. If they don’t show good results, you are answerable to your investors.

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Developing business strategy

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Your numbers will show you which products are doing well, which advertising campaign has got you the highest number of sales, are your customers expecting customized products or standardized products, are they willing to pay a higher price, how are your costs holding up etc. Each of these factors will affect the strategy you take up such as cost leadership, differentiation, product development, niche market sales etc.