Basic Roles of Accounting Bookkeeping
Accounting Bookkeeping is an integral part of the operation of the business. It makes it possible to meet the legal obligation to follow mandatory registers, but also helps to monitor the results, analyze performance and manage the company. Whether the bookkeeping is done by a permanent employee or a firm, they are a valuable tool in helping to make decisions that affect the future of the business.
Accounting records are mandatory for a company
A company must keep books of accounting that reflect all the accounting operations carried out during the year. The company must also prepare year-end entries, payroll, tax returns and financial reports. Accounting bookkeeping also contributes to accurately completing the returns requested by the Federal Board of Revenue, and other government bodies.
It monitors the current and previous financial situation and allows comparisons to be made
The recording of accounting entries and bank reconciliations give a fair and real-time view of the company’s performance and cash flow. The manager can compare the current state of the company with past situations, measure and analyze the differences with the budget.
Accounting Bookkeeping helps to make future plans and forecast
It is by following his accounting closely that one is able to know the precise financial situation of the company and make forecasts. Contrary to popular belief, rigorous monitoring is not only necessary in times of crisis. The development of an activity is a sensitive situation that generates a need for working capital and also requires daily monitoring.
It is the best way to track and control expenses
Saving accounting entries and analyzing expenses in real time allows you to know your production costs, avoid unnecessary expenses and slippage without having the time to significantly affect profitability.
Accounting bookkeeping tracks stocks, billing and customer Aging
It is with a rigorous recording of accounting data that we can track and compare inventory, billing, verify that all products and services sold have been billed, and monitor the amount outstanding by each customer.
It helps to optimize the management of the company
In an economic context of competition, a rigorous monitoring of the accounts makes it possible to take the appropriate decisions without wasting time, to maximize the profits and to increase the chances of survival of the company.
Bookkeeping reduces the risk of errors by structuring revenues and expenses
Self-employed individuals and SMEs who keep books structure their expenses and incomes, making fewer mistakes in exaggerated statements or unclear statements.
It saves time in case of an accounting check
Accurate bookkeeping, records, and well-stocked documents save time in the case of an audit and escape from corrective action due to a lack of accounting or the inability to produce a proper accounting record.
Bookkeeping is an obligation, but it is also a valuable instrument of management. Rigorous recording and monitoring of accounting allows the manager to optimize the management of his business by making informed decisions in a timely manner.