Accounting in one form or another has existed for a very long time and appeared around the time people began to engage in trade.
This kind of accounting makes sense because if we want to conduct business in an organized way, then we need an accounting system to streamline and track business transactions.
If we use terminology, then accounting is an orderly system for collecting, registering, and summarizing information in monetary terms about the state of the property, obligations of the organization, and their changes (cash flow) through continuous and documentary accounting of all business transactions.
In simple terms, accounting is the recording of all transactions in any way related to the activities of a company.
Two concepts- “Ledger” and “Double Entry”, deserve special attention.
The “General Ledger” is like the most important ledger in which the entire business history of the company is entered. Buying, selling, manufacturing, salary, taxes- they are all stored in the ledgers.
“Double-entry” is when top accounting companies in India simultaneously write what they took and where they put it, that is, they write down both the debit and the credit of the accounting entry.
What does account give?
Accounting is important not only for calculating taxes, as many entrepreneurs are used to thinking, it is necessary if you want to be able to evaluate and analyze your business and make certain forecasts of its development.
Having top accounting firms in Delhi for tracking the assets, liabilities, and income of your business allows you to make sound and informed business decisions and always have an idea of the state of the business as a whole.
With a clear, organized accounting system, you can not only analyze your company’s financial data but also help it grow and generate profits.
Knowing where your company is financially in terms of revenue and expense will help you better understand what you need to do in the future to maintain that level or drive growth.
Accounting also helps you keep track of who owes you, what you owe someone, keep track of salaries, track lsoans, attract potential investors, maintain a budget, and provide all the necessary tax data.
Who Should Organize the Accounting?
The answer to this question for a new business depends on how quickly you expect growth. This can be an on-staff accountant or a third-party accounting audit service.
Understanding where your cash flow in and out will help you make better decisions to avoid failure. If you don’t know where your money is going and where it is coming from, the chances are very high that you will lose control of your business.
When businesses manage their income and expenses, there is greater growth potential. Plus, there is better access to strategies that can help companies weather unexpected financial downturns.
Accounting is essentially a report on the financial performance of a company. In the company ledger, accountants and small business owners can keep track of the income and expenses of the daily operations of the business.
Accurate accounting of a company’s finances can help a business manage its financial future and understand cash flow.
This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.
CA Aman Aggarwal
AKGVG & Associates