This is the capturing, maintaining and providing a company s financial information for decision making. When Bookkeeping Temecula CA, many benefits to it. They include compliance to a country s compliance laws, availability of ready information for decision making, cutting cost, preventing fraud and also for making long term plans 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
Fraud can be detected. Book keeping ensures there a prove that a transaction was done in the books of accounts. Having this books ensures that what is in the bank matches what has been captured.when doing bank reconciliations, then fraud can be unearthed. The reconciliations should be done regularly to ensure that fraud is detected early enough
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.
For planning purposes. The Book keeping function helps in coming up with budgets from past data. This is key so that the company would not run out of cash in the near future. It also helps companies know the priorities in terms of purchases, which suppliers are falling due, expenses to pay and also money expected so that planning can be done accordingly.
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 book keeping function must be seamless because this is the most area where fraud occurs. Checks must be done frequently and also segregation of duties done to reduce chances or irregularity. Internal auditors also ensure that financial controls are implemented and followed. Auditing these controls also prevents mistakes, fraud, loss of resources in the organization.
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
Fraud can be detected. Book keeping ensures there a prove that a transaction was done in the books of accounts. Having this books ensures that what is in the bank matches what has been captured.when doing bank reconciliations, then fraud can be unearthed. The reconciliations should be done regularly to ensure that fraud is detected early enough
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.
For planning purposes. The Book keeping function helps in coming up with budgets from past data. This is key so that the company would not run out of cash in the near future. It also helps companies know the priorities in terms of purchases, which suppliers are falling due, expenses to pay and also money expected so that planning can be done accordingly.
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 book keeping function must be seamless because this is the most area where fraud occurs. Checks must be done frequently and also segregation of duties done to reduce chances or irregularity. Internal auditors also ensure that financial controls are implemented and followed. Auditing these controls also prevents mistakes, fraud, loss of resources in the organization.
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