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Role of accounting and finance in success of a company

Accounting plays a vital role in running a business because it helps you track income and expenditures, ensure statutory compliance, and provide investors, management, and government with quantitative financial information which can be used in making business decisions.

There are three key financial statements generated by your records.

The income statement provides you with information about the profit and loss.
The balance sheet gives you a clear picture on the financial position of your business on a particular date.
The cash flow statement is a bridge between the income statement and balance sheet and reports the cash generated and spent during a specific period of time.

Obeying the Law

Financial accounting information must be assembled and reported objectively. When you rely on virtual accounting services, you have the right to be assured that your financial accounting information is free from bias and inconsistency, whether deliberate or not. For this reason, financial accounting relies on certain accounting best practices and standards called “Generally Accepted Accounting Principles” (GAAP).

Creating Budgets and Financial Records

Budgets are financial plans for future periods that provide guidance to various insiders. to help achieve organizational goals. They are statements of intention that reflect the priorities of their authors. The audience for the budget of an organization is the insiders of that organization. Budgets are useful for allocating the resources of an entity to different areas and departments within it and for controlling and monitoring how such resources are spent. Financial statements report the actual use of resources by the administrators in the past year. Management can make use of this accounting leeway to achieve deficits in their operations so that they can ask for more funding from their donors or to achieve an advantageous wage settlement with their employees.

Analysing Financial Performance

Financial performance analysis includes analysis and interpretation of financial statements in such a way that it undertakes full diagnosis of the profitability and financial soundness of the business. The financial analyst program provides vital methodologies of financial analysis.

Developing Business Strategy

Strategic planning, and even visioning, cannot be casually ideated in a few hours. Often, strategic planning is associated with completing a SWOT analysis. Participants show up for an all-day meeting and end up with a list of opportunities including imprecise strategies, such as “expand internationally.” Their list is void of any market analysis, research and business intelligence. When their ill-conceived tactics fail, they blame the strategy.

Develop a true vision.
Define competitive advantage.
Define your targets.
Focus on systematic growth.
Make fact-based decisions.
Think long term.
But, be nimble.
Be inclusive.
Invest time in pre-work.
Measure your results and execute excellently.