Accounting is just keeping score
Anyone who’s worked in an office at some point or another has had to visit the accounts department. Here you find the people who pay and send out the bills that keep the business running. They do a lot more than that, though. Sometimes referred to as “bean counters” they also keep their eye on profits, costs and losses. You’d have no way of knowing just how profitable – or not – your business is without some form of accounting.
No matter what business you’re in, even if all you do is balance a bank account, that’s still accounting. It’s part of even a teenager’s life. Saving an allowance, spending it all at once – these are accounting principles.
Accounting is a crucial part of any business. It’s how the score is kept and determines whether a business makes a profit or loss and by how much.Accounts are used to monitor the success of a business and to gauge plans against the actual results.
If you’re self employed hopefully you use a good accountant who keeps accurate results. Don’t forget these accounts will form the basis of how much tax you pay.
Every business and every individual needs to have some kind of accounting system in their lives. Otherwise, the finances can get away from them, they don’t know what they’ve spent, or whether they can expect a profit or a loss from their business. Staying on top of accounting, whether it’s for a multi-billion pound business or for a personal bank account is a necessary activity on a daily basis .
Operating without accounting would be like playing an important football match without keeping score or playing a major golf tournament without marking the card.