is Accounting important in business to provide a general overview of how the business is doing
financially. Understanding accounting greatly helps the business owner make profitable decisions for
the company.
1.
Profit and Loss
Accounting allows the business owner to see where profit is being made and where
losses are occurring, helping him know where improvements need to be made.
o
Cash Flow
Through accounting, the business owner can see where money is being spent; this
allows for better understanding and budgeting of money.
o
Balance Sheet
Seeing if profits are large enough to overcome expenses is tantamount in business; this
information defines the success of the operation.
o
Financial Decisions
With the accounting, business owner can make financial decisions that will be most
lucrative in the long run.
o
Taxes
All financial records are kept in order thanks to accounting; this allows taxes to be
executed easily and precisely at the end of the year.
o
ThequarterofCanadiansmallbusinessownersrepresentedinthesurveymayhavesimplybeennewand
youngbusinessesandbusinessownerswhoareunfamiliarwithaccountingandbusinessneeds.Withoutthis
knowledgeofaccounting,however,abusinesswillfinditdifficulttogrowandhaveabetterunderstandingofits
daytodayactivities.Whilereadingthearticle,Ihaverealizedthatregardlessofabusinessproductorservice,
atrulysuccessfulbusinessownerwillhaveanunderstandingaccounting.