As you know, the activities of any company and even an individual entrepreneur should be displayed in the financial documentation. This rule is indispensable for any company, regardless of the scope, volume and complexity of operations. In this article we will tell you what accounting tasks are and explain why its mandatory maintenance is not a legislative whim, but a necessity.
To begin with, let's pay attention to the concept of an information system, which is a means of providing people with the information they need in the process of activity. Accounting, in fact, is the same information system for the enterprise and provides the necessary data for users of accounting information. Based on this, we can formulate the main objectives of accounting:
1) The first and most important task is the formation of the most complete and reliable picture of the economic activity of the company. The importance of this accounting task is that on the basis of the data presented in the statements, the heads of the company, investors, shareholders and other users of information make various kinds of decisions: managerial, financial, the decision on the provision or non-provision of borrowed funds, and so on. The more accurately records are kept, the less errors financial data contain, the more likely it is that information users will make rational and profitable decisions, which means that their personal well-being and welfare of the company will grow.
2) Monitoring the work of the company, timely identification of deviations from plans and forecasts, identifying their causes and formulating proposals for adjusting the current situation - a study of accountants' accounts helps to understand whether the company works according to management plans. If the values of the control indicators differ from the predicted ones, this should be the reason for a more detailed analysis up to official investigations.
3) Identification of various kinds of reserves at the company, due to which additional financial, payment, and economic stability of the company can be ensured. This refers to the control of the availability and movement of various kinds of resources - financial material (raw materials, consumables, tools and so on) and labor
4) Control over the feasibility of transactions - thanks to the analysis of accounting indicators, you can determine which operations are profitable for the company, and which, on the contrary, bring only losses. It is thanks to the implementation of this task of accounting that enterprises are minimizing the types of economic activity that are not profitable for them and are moving to more profitable ones.
5) Monitoring the conformity of the enterprise’s activities with the norms of the law - by studying the reporting of the enterprise, the regulatory authorities (tax administration, pension fund, social insurance fund ) can draw conclusions about whether its activities comply with the laws that regulate it, whether all taxes and mandatory contributions are paid in full . In case of violations, these bodies can influence the organization in order to return it to the legal framework.
Based on the above list, we can conclude that the goals and objectives of accounting completely and fully explain the need for its maintenance. Thanks to competent accounting, the company can provide the necessary information to persons directly involved in its daily activities and development. In addition, accounting makes it possible to quickly monitor all ongoing operations, and in case of problems as quickly and efficiently as possible to respond to them.