Before understanding the importance of accounting for your business, it is essential to understand what accounting is, is it not? So, let’s go! Accounting can be understood as a structured system of information about the activities of a company. Its objective is to present information of patrimonial, economic, financial and social nature about an entity that supports the decision-making process of its various stakeholders.
The risks of not having a well-organized accounting are many. For Paccez, a company that does not have structured accounting runs the risk of incurring inappropriate decisions because they are not supported by real information that allows assessing a priori the impact it will cause to the entity. Decisions based only on the experience or “feeling” of the decision maker, without an adequate support of consolidated data obtained through accounting, can cause irreversible damage to the organization.
In order not to take these risks, be sure to follow today’s post!
Importance Of Accounting
For a company, from micro to multinational, the importance of accounting is indisputable. According to accountant Karina Brandalize, the information recorded provides data administrators for decision-making, in addition to maintaining the regular situation of companies vis-à-vis the municipal, state and federal powers.
It also helps entrepreneurs obtain their operating licenses and overcome the enormous barrier of bureaucracy. “The formalization intermediated by the accounting offices opens up a range of business possibilities for companies and also opens the door to access to programs to encourage entrepreneurship, such as the programs of the National Development Bank (BNDES)”, explains the accountant.
According to the Brazilian Micro and Small Business Support Service (SEBRAE), most small and medium-sized companies do not complete one year of life. At least 70% of them do not reach the age of five. An essential point for this negative result is not to give importance to the management of information and knowledge, with a focus on its improvement and growth. Large corporations have already adopted this procedure.
And small and medium-sized companies should follow this trend, in the opinion of Silvio Soledade, director of PlanoGestão Consultoria Empresarial. According to him, one of the fundamental measures in any company is to have an adequate information system. This requires reliable internal control to generate reports for decision making.
Nowadays, as explained by Almério Barros, partner at the Hands-on Solutions consultancy, many companies are looking more at accounting. However, only in fear of electronic inspections by the IRS. Few, according to him, really care about improving controls, creating management metrics , corporate goals, monitoring monthly results and comparing with the previous month and the previous year, for example.
It is necessary to be clear that accounting is a potency of information that crosses and talks and helps in the evaluation of investments, and that together with other data such as cash flow, they can be sure of the best way to invest and grow. “Accounting is not limited to fulfilling the various legal obligations or standards. It is an important management resource ”, adds Yann Fromont, accountant and managing partner at Gorioux Faro Assessoria Contábil.
Check out some other advantages here:
One of the uses of accounting is to have your numbers as a historical basis for planning the future. Thus, the company’s strategy is transformed into financial metrics that will be monitored by all company managers, according to the professor at Trevisan Escola de Negócios, Simone Alves da Costa.
Capture Made Easy
“A company with up-to-date accounting has access to capital in top-tier banks, as well as being able to arouse the interests of investment funds due to the ease of auditing and checking the information”, says Barros.
Investigation Of What Has Been Accomplished
“It is possible to monitor whether what has been planned is in fact being carried out, in order to achieve the profit and performance goals defined by the company”, says Alves da Costa.
According to the partner of the consulting firm Hands-on Solutions, companies whose accounting is used as a strategic and managerial decision tool are able to assess fiscal, tax risks and the application of new laws, in order to anticipate the effects and take precautions. They can also carry out internal and independent audits to improve their controls or start a process of forming a compliance area whose purpose is to improve the quality of information and prevent fraud in the company.
Enhances The Achievement Of Efficiency And Effectiveness
For the teacher, with efficiency being the best use of resources and effectiveness in achieving objectives, the accounting information system favors the monitoring of both, that is, verifying whether the objective was achieved by making the best possible use of resources.
In addition to demonstrating whether the company has cash to honor its commitments, it helps to assess payment and receipt terms, as sometimes companies are able to generate cash, but do not have the stamina and working capital to handle an investment and operational process together, explains Barros.
Anticipates Financing And Investment Needs
Another important aspect is the need for working capital and reinvestment in the business itself. In this regard, the accounting tools favor the anticipation of needs related to these items, believes Alves da Costa.
“With an adjusted and up-to-date accounting, the company and anyone interested in evaluating its results and its equity position will have access to its balance sheets and results in the last three years”, says Barros.
In other words, “a company without accounting is a company without clarity of numbers, attitudes and results. It is a company with no transparency in its operations, with total discredit to the public with which it relates ”, concludes Sergio Bessa, consultant at GC-5 Corporate Solutions and professor at Fundação Getúlio Vargas (FGV).
If your company does not take accounting very seriously, structure an area that takes care of the company’s accounts right now. It is essential for your success! And to follow all our posts, subscribe now to our newsletter.