In business, there are many factors that must be considered in order to ensure that they business is on the right track, specifically in financial matters. One of these is the aspect of bookkeeping. This paper discusses the importance of bookkeeping and will discuss laws that govern accounting aspects. Importance of Bookkeeping Bookkeeping is one of the most important aspects in financial management. It is the process of recording the financial transactions made by the company and considered as the first basic step of accounting context.
Bookkeeping is important because it will definitely help you in terms of monitoring how the company is going daily, weekly and monthly. It is essential since it will help the company organize the financial transaction records which include the receipts, checks, canceled, cash disbursements and sales. The bookkeeping approach makes sure that the financial aspects are organized and balanced and enables the company to know where their money and other financial matters are going. Having this kind of bookkeeping is noted to be one of the vital keys for having successful business.
A lost receipt is equivalent to lost deduction which may result for more money to be paid out in taxes. Having good bookkeeping can help the business save more financially. In addition, having organized, accurate and balanced bookkeeping records also allows the company to gain more trusts from different investors and lenders in the long ran since they will be able to see complete financial data before providing you with your needs. In addition, bookkeeping records is also important to manage the financial status of the entire business and to keep track of what is happening to the company financially.
Governing Laws in Accounting In order to know that accountants are doing their jobs accurately and organized with correct information, different authorities has been able to formulate and establish accounting laws which should be followed by different companies and industries. Most accounting laws aims on restoring faith from different stakeholders. Accounting laws varies on different nations and each of the government tries to impose laws to serve as a standard model for different companies in making their accounting statements.
One of the laws or policies in accounting is the international accounting standards. Being able to know the significance of financial accounting and reporting, scholars have standardized financial accounting and established the International Accounting Standards committee (PricewaterhouseCoopers, 2002). The IASC known today as International Accounting Standard Board (IASB) has been able to establish the International Financial reporting Standards. The IFRS has been applied in the global contexts and Europe, US and other countries try to follow the new standardized and harmonized accounting policies.
IFRS policies and laws are generated to apply to general objective of the financial statements and other financial reporting of different industries. This governing laws permits different business entities to report their financial accounting and statements with more disclosure. The purpose of these governing laws is to create fair value for all involved stakeholders in the financial statements. Reference Price Water House Coopers (2008). Online available at https://www. pwc. com/gx/eng/about/svcs/corporatereporting/IFRSforSMEs. pdf Retrieved on December 12, 2008