accounting and finance assignment help

accounting and finance assignment help

The Importance of Accounting and Finance in Business

1. Introduction

Accounting and finance have two different ways of working. They show variation in how the information is used. In non-profit organizations, knowledge and skills in this financial framework are required for success and for proper decision making. It is especially used in governmental areas. In some studies, it is concluded that official financing is restricted in its research and other activities. In the history of every significant occurrence, an accountant is associated. Accounting is a field that has undergone many changes over the years, and it will continue to change in the future. The changes in the areas of technology have made the work of accountants more efficient and increased their job performance. Accounting also handles presenting the financial information of that business in an analytical form, while finance demands technology tools that help in sound discovery. This framework can be used even to compare companies and assist in those sectors that are within and outside our country. The accounting financial tool has its major and minor areas necessary for the proper solving of the company’s financial problems.

Accounting and finance add great value in the business industry at any level. Organizations, businesses, and firms are always in need of these two financial tools. Without them, the organization’s growth remains doubtful. Proper accounting and finance prove to cut the total risk of an organization or business. In business or industries, these two financial tools are most important. Finance and accounting deal with the studying of investments. The existing value of the organization is mainly shown in the financial position of the business, and it is well taken care of by accounting. Though their opinion and way of handling the organization are the same, they both are different. Without finance, anyone can invest. Growth and development of companies, industries, and businesses cannot take place. But without accounting, business cannot be tried. In this modern trend, every business person needs these two major financial frameworks for development and the expansion of the firm or company. Making financial decisions, risk management, and transaction analysis heavily rely on these two…

2. Role of Accounting in Business

Further, until the identification and management of income and expenses are not properly practiced, one cannot realize the profit or loss incurred by the organization. Meanwhile, operating costs or expenses incurred by the activity of the firm are one of the major factors which would lead to loss in the organization.

The purpose of a business is to make maximum profits with optimum utilization of funds. To achieve the goal of the business without having proper accounting of funds will lead to losses. This is because even the wastages in accounting are considered for earmarking of revenue and its matching costs or expenses to present a true and fair view of accounting performance. It is only then that relevance, reliability, comparability, and timeliness can be assured. Also, the liquidity, solvency, quick, and current ratio can be projected only through accounting information, which becomes essential when the funds need is identified.

The role of accounting started first with bookkeeping. Firstly, the financial position of a business is ascertained by following the generally accepted accounting principles in recording the transactions. Later, the financial performance of a business is communicated as the income statement based on the matching concept, irrespective of whether it is included in cash or not.

Accounting has gained enormous importance since the rise of the joint stock company. Earlier, each partner was supposed to maintain a separate set of records, which resulted in duplication of work. With an increase in the size of the business and the emergence of separate capital providers and managers, the amount of accounting work has increased. Also, to avoid errors and frauds, the need for the misutilization of funds and misreporting of financial position, the branch of accounting called auditing became prominent.

3. Role of Finance in Business

The definition of financial management encompasses main functions that are creating a capital structure. So we can see that the objective of the financial functions is to increase the wealth of the company’s shareholders. One of the functions of financial management consists of planning, organizing, directing, together with the control of the appropriation and use of funds by an economic agent who knows what investments to carry out within a project, the sources of financing, the decision to allocate it, and control over the results that are produced. Maintaining a good cash flow to achieve proper financial planning and being able to invest excess liquidity is a key element in the management of financial resources, since it is about having the right amount at the right time and not having a surplus. Keep in mind that accounting and finance are closely related to each other and depend on each other to organize efficient processes that guarantee the economic stability of a company and meet the objectives set.

One of the first questions to consider when discussing the objectives of the business and being able to set goals that help finance is: What is the importance of finance in business administration? In business management, financial management is responsible for establishing, planning, directing, coordinating, and executing all the tasks that are related to the financial resources of an organization and having a medium and long-term vision. Financial management is responsible for obtaining funds through the best possible combination of credit and equity with the sole aim of maximizing the wealth of the company’s shareholders. This means that finance is the cornerstone of the management of public and private organizations, as it offers the tools needed for any organization to effectively manage and make decisions.

4. Benefits of Professional Accounting and Finance Assistance

The importance of professional accounting and finance assistance exists in the function it performs. Some of these functions include: revenue forecast – every business or organization projects possible income at a required time, but what determines it could be as a result of proper financial planning. Other expenses like capital, raw materials, direct costs, etc. should always form parts of financial interest. So, every CEO or owner of a business who does not consider putting in place an appropriate accounting and financial department is driving the enterprise or business to failure. An accounting and finance professional will help in proper business forecasting.

In the early years of the age of developed technology, running a business or enterprise demands less professional office management skills like the financial procedures and policies due to the fewer human resources employed. It could just require a pen and paper to note down simple transactions, cash or services received, an activity organized like cultural, religious events, very simple agricultural activities with fewer market demands. But today the concept in demand has transformed into a great asset of finance to be managed properly within a strong established accounting and finance department to achieve a successful business in the market. This high demand has established a lot of requirements for public, private, and governmental organizations to have appropriate financial systems that are supposed to guide and record strong decision making for short and long-term goals in the activities management career. Graduates of accounting and finance have no problem in securing jobs if the state’s economy is in good shape.

5. Conclusion

This specific topic is so important as it is the foundation or basis of a business. Like when building a building, of course, you will not immediately look at the design and appearance of the building without the presence of concrete pillars, well-graded steel, and so on. Just like a company that wants to grow and develop, the company must monitor the company’s finances. Business people control every expenditure made, so all finances can be utilized as efficiently, effectively, and appropriately as possible to support growth and development.

Understanding the finances of your own business is a critical thing to know if you are going to grow a company. It is very important to know exactly how your entire organizational structure will perform its long-term financial planning to operate and what steps you can take to achieve them. It also gives you the opportunity to know whether the company is heading toward positive growth or if the company is suffering from financial hardship. Financial analysis is the ability of a company to continue to use its capital resources and other financial resources to continue to operate in the short term. When company managers are planning to operate the business for a long time, they have to think carefully about whether the company can keep its growth and how it can effectively finance it when it needs money.