What is Accounting?

Accounting records offer benefits that help you make smart business decisions. With Accounting, you can identify money-making opportunities, avoid cash-flow problems, and find ways to increase income or decrease spending. Good Accounting records are also beneficial when applying for a business loan. By keeping good and accurate records, you make it easier for lenders to make decisions about your business.

No matter what type of business you have, compliance with business tax laws is a must. Certain benefits of Accounting, depending upon your situation, include the ability to pay income taxes, PAYE, UIF and VAT. You'll be less anxious about your Accounting records if you find yourself facing a SARS audit. According to the AIPB, Accounting records are valuable to have during an audit. You'll have items such as credit notes, receipts, tax returns, and other papers related to the audit.

Two risk-reducing benefits associated with Accounting are the ability to detect fraud and embezzlement. You might not want to think about it, but there's always a chance that your business will experience fraud or embezzlement if you have employees or business partners. If your bookkeeper is honest and good at the job, she'll be able to spot suspicious business transactions.

A comprehensive Accounting system allows a business owner to analyse spending and revenue one item at a time. The data can be grouped by the week, month, quarter or year to be analysed and compared to past years. This is one way that business owners can discover ways to cut back on company spending and improve profitability.

Companies require an accurate report of current spending and revenue to help compare actual results with projections in the annual budget. An Accounting system facilitates up-to-date company financial information that can be cross-checked with the budget to make sure that the company is not overspending. Accounting also identifies instances of under-spending so the company may find new uses for the extra money to help productivity.

An Accounting system makes it easier to report revenue for tax filings at the end of the year, but a comprehensive spending profile can also help you find tax deductions that will lower your tax burden. Without an Accounting system, you would have no documentation to back up your deductions.

Accounting services include checking the accuracy of each payroll period to make sure that each employee receives the proper amount; an especially important function in organizations that pay bonuses, sales commissions and supplemental payments based on a percentage of revenue. Confirming payroll numbers keeps employees satisfied with their pay and prevents the company from over- or underpaying PAYE as well.

Running a business day-to-day is time-consuming, and sometimes the little things are left undone. Not paying a bill is one of those mundane tasks that can result in major consequences. Accounting will allow you to remain on top of your bill payments as you will be able to easily see which creditors have become due to be paid.

If you're a small business owner who loves the big-picture aspects of operating a business, you probably dread the detailed accounting required to maintain the business. Landing a contract is fun and rewarding. Opening a software program, creating invoices and entering payments received are miserable if you don't care for the details. Hire an Accounting service to take care of those tasks for you. This way you will able to keep track of the performances of the different streams of income, thus allowing you to plan better for the future.

Creditors need accurate information about their financial position before they give out a loan. Good records show potential creditors that the owners of a business what is going on with their business.