The importance of bookkeeping and accounting cannot be emphasized enough. An important part of any business or organization is, arguably, the money that comes in and the money that goes out. By definition, bookkeeping is the process of recording your or a company’s financial transactions and the first basic step of the accounting process. The accounting process involves classifying, reporting and analyzing of data and none of it can take place if there is no organized and accurate bookkeeping.
Bookkeeping is important in any business small or large sized. Sad to say, this process is often neglected which has a direct adverse effect on the business. It is the process of recording your company’s financial transactions and is the first basic step of the accounting process.
Importance of Bookkeeping and Accounting
In today’s dynamic and complex business environment, it is very important to keep our accounting records clean and up to date. Proper accounting is important to any enterprise because of the following reason:
(1) Helps in evaluating the performance of business
As discussed above, the accounting records reflects the results of operations as well as statement of financial position. Also various balance sheet and profit & loss accounts ratios are calculated which help user of financial statements to analyze the performance of an entity. For example debt equity ratio, Current ratio, Turnover ratio etc. Also we can compare previous period accounting data with current period as well as budgeted figures for variance analysis.
_副本.jpg "Company Bookkeeping and Accounting")
(2) Helps to manage and monitor cash flow
The working capital and cash requirement of an enterprise can be duly taken care by proper accounting system.
(3) Helps business to be statutory compliant
Proper business accounting ensures timely recording our liabilities which needs to be paid within the prescribed time line. This includes provident fund, pension fund, VAT, sales tax, Income tax. Timely payment of liabilities helps enterprises to be statutory compliant.
(4) Helps to create budget and future projections
Accounting data helps an enterprise to prepare budget and forecast for future period. Business trends are projected based on past data produced by accounting system.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020,Dongmen Rd South, Luohu, Shenzhen, China.
Previous：China Corporate Income Tax (CIT)
Next：China Corporate Financial Solutions