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Updated by Joanna James on Feb 11, 2018
Headline for Benefits of Having Organised Accounting and Financial Services – The Importance of Account Management
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Joanna James Joanna James
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Benefits of Having Organised Accounting and Financial Services – The Importance of Account Management

Business in the modern age can be a lot more complex than what it used to be, and organised accounting methods are integral to the efficient operations of a business organisation.

1

Financial Transparency

Even the minutest of numerical imbalances can snowball into catastrophic consequences where a balance sheet is concerned. There are many things to consider when calculating the value of assets for instance, such as depreciation for instance, where assets after their purchase will immediately begin to lose value. Reporting income is also not a very simple task, since cash inflows have to be placed into various categories such as cash and accounts receivable. In the present day, one of the most convenient means to overcome these complications is to enlist the help of finance and accounting outsourcing facilities, with many to choose from such as H-Connect.

2

Mitigate Errors

Perhaps the easiest and most reliable way to identify any internal malpractices is through the analysis of financial statements. This makes it crucial that organisations maintain them as accurately and as comprehensively as possible. If you feel that there are costly mistakes occurring somewhere within your firm, reconciliation activities might be the perfect way to identify the source of these problems. Most companies around the world invest much time and effort in these activities to maintain the efficiency and profitability of their corporate activities.

3

Build Trust

If a company's financial records are spotless it creates a lot of trust, both internally and externally. Within the company, no one would be mistrusting their colleagues and creating an atmosphere of suspicion and negativity. Externally, investors will also be attracted to the company, and will be very likely to view the organisation as something to channel money into. Of recent times, many companies, large and small, have been caught misrepresenting their financial data, sometimes even with the help of accounting firms. Governments have consequently introduced more rigorous rules in regards to accounting and as a result, everyone is more aware of the importance of clear and positive financial records.

4

Improved Payment Cycles

Accurate accounting records will ensure that a whole range of operations within the company will run smoothly. Outgoing cash-flows involve important things such as salaries, and if these were delayed, it would decrease employee motivation which is integral to the efficiency of the company. If shareholder dividends get delayed, it can cause severe issues. Creditors need to be paid and inventories managed and all this is will simply not be taken care of unless the accounts of the company are in order and managed efficiently.

5

Better Forecasting and Planning

Accurate financial records showcase an in-depth analysis of the company's performance and present state, which makes it crucial where decision-making, is concerned. Such statistics would enable the company to decide whether they are able to afford more assets, or able to expand into newer territories. If the values of certain assets are depreciating fast, then the company can quickly sell them off and replace them without having to deal with obsolete and value-less properties.