This function is one of the most roles in a company. Bookkeeping Temecula CA every organization if the organization wants to reach their vision. This function is the stepping stone of Audit. The auditors inspect the entries made in order to come up with an opinion whether they are true and fair view of the company.
There are many activities that are involved in this activity. They span from the initial stage of initiation of a transaction to recording and summary of these transactions at year end to make informed decisions. The accountants perform this role. Both large and small companies need book keeping functions for a number of reasons. They are
Detection of unauthorized transaction that could be fleecing the company money. These transaction could be either by bank account transfers, posting non existing expenses, over stating prices of goods and services, paying for services not rendered, understatement of expenses or even petty cash fraud. Proper book keeping would raise red flags on these activities.
Decision making by management becomes easy. This is because there is ready information from accounting entries for reference. Decisions that involves money should be done on a basis of what is available in the bank, otherwise irrational decisions made on the basis of gut feeling can lead to losses. Decision making can be for future or for the present example whether to purchase now or then, whether to expect 100% collection rate or not, decisions associated with the levels of provisions.
Helps in cutting costs. Book keeping helps identify areas where there are greatest cost elements and also comes up with ways of cutting these costs. There are a lot of costs drivers in accompany and so if a company keeps its book well, they may identify these areas and come up with ways of cutting the costs.
To comply with the laws and regulations of the country, each company must file returns to aid in taxation. The government would want to know how much a company makes interms of profits so that they can get the correct amount of tax to be charged. This is aided by keeping proper books and confirmed by an independent auditor.
Budgeting also is done based on this function. Data from past activities can inform the financial planning for the future. It gives the company a perspective of the future and what to expect in terms of costs and income levels. Budgets can have a variance which can be explained by reference to the book keeping function.
It identifies errors and mistakes in financial figures. When Book keeping can be used to identify mistakes by way of paper and audit trail. When a mistake is discovered, it is easy to go back to the original documents of entry and trace the whole trail. Mistakes can be intentional or not intentional. Intentional mistakes mostly lead to fraud in a company.
The accounting function works hand in hand with auditing. The auditing function validates the data that has been input into the accounting system as that which is true. It is very important for every company to come up with a proper book keeping system and also hire professionals in this area of study. The accounting department might be seen as a cost centre but the benefits of having it out weighs the costs of not having this function in place
There are many activities that are involved in this activity. They span from the initial stage of initiation of a transaction to recording and summary of these transactions at year end to make informed decisions. The accountants perform this role. Both large and small companies need book keeping functions for a number of reasons. They are
Detection of unauthorized transaction that could be fleecing the company money. These transaction could be either by bank account transfers, posting non existing expenses, over stating prices of goods and services, paying for services not rendered, understatement of expenses or even petty cash fraud. Proper book keeping would raise red flags on these activities.
Decision making by management becomes easy. This is because there is ready information from accounting entries for reference. Decisions that involves money should be done on a basis of what is available in the bank, otherwise irrational decisions made on the basis of gut feeling can lead to losses. Decision making can be for future or for the present example whether to purchase now or then, whether to expect 100% collection rate or not, decisions associated with the levels of provisions.
Helps in cutting costs. Book keeping helps identify areas where there are greatest cost elements and also comes up with ways of cutting these costs. There are a lot of costs drivers in accompany and so if a company keeps its book well, they may identify these areas and come up with ways of cutting the costs.
To comply with the laws and regulations of the country, each company must file returns to aid in taxation. The government would want to know how much a company makes interms of profits so that they can get the correct amount of tax to be charged. This is aided by keeping proper books and confirmed by an independent auditor.
Budgeting also is done based on this function. Data from past activities can inform the financial planning for the future. It gives the company a perspective of the future and what to expect in terms of costs and income levels. Budgets can have a variance which can be explained by reference to the book keeping function.
It identifies errors and mistakes in financial figures. When Book keeping can be used to identify mistakes by way of paper and audit trail. When a mistake is discovered, it is easy to go back to the original documents of entry and trace the whole trail. Mistakes can be intentional or not intentional. Intentional mistakes mostly lead to fraud in a company.
The accounting function works hand in hand with auditing. The auditing function validates the data that has been input into the accounting system as that which is true. It is very important for every company to come up with a proper book keeping system and also hire professionals in this area of study. The accounting department might be seen as a cost centre but the benefits of having it out weighs the costs of not having this function in place
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