Accounting is considered as the language of the business as one can understand everything about the business by delving into the various accounting books of the company. with proper accounting, it is possible for a company to grow at a better rate and also assist in the judicious use of all the resources present with the company. The accounting will also help in understanding the financial condition of the business and will assist the management in planning for the future.
A business must follow certain good accounting practices which will not only cement its position in the market but will also help in knowing all the different loopholes in the working of the business and take steps accordingly.
Good Accounting Practices
Some of the good accounting practices which should be followed by a business are given below:
- Following the Accounting Standard
Accounting standards are global guidelines which help the business to prepare all their accounting books in a certain fashion. In his way, the business can easily transact with various other businesses and can understand the Accounting Function of other businesses. This will allow for easy movement of liquidity and also help in creating better cash flow management.
For more information about the type of accounting standard followed in the United Arab Emirate read our blog “Accounting Standards for Private Companies in UAE”
- Record All the Transactions of the Company
The management should record all the transactions of the company so that it faces no problem in the future. Keeping up to date business transactions records are very important as they will help in preparing accurate accounting records. These records will also help during tax filings and will assist the management during the preparation of a budget.
- Keep a Record of the before and after of a Transaction
All the transactions should be properly documented and the before and after of the transaction should be recorded. This will help the management is understanding if the asset is being used properly or not.
If your company is just starting out, then all the tracking can be done with the help of simple tools such as a spreadsheet but as the business grows there will be a requirement for bigger and more accurate tools. These tools will be complex and will be difficult to use. At this point in time, you should take the assistance of a third party which will provide accurate and to the point results.
- Review the Accounts periodically
It is the duty of the management to review the company accounts at certain intervals. They can take the help of an accountant for this. Conducting reviews at intervals will help the management in understanding the various bottlenecks in the business and will be able to take steps to remedy the situation. This will not only help the management to understand the working of the business but will also make the accounting process less complicated as a part of the books have already been decoded.
- Create and Stick to a Budget
Adherence to a budget will work wonders for a business. it will provide a guideline according to which a business can spend. The Budgets will also help in the proper cash flow management and will help in taking any future decisions for the business.
- Create a Backup of all Financial records
After the transactions are made the proof of the transactions may be required in the future due to various reasons. Keeping a backup of the transactions can help during such situations. The backup can be kept either on paper or on the various accounting software.
- Take professional Assistance
Creating and maintaining transactional records can look easy in the beginning but as time passes he records become harder to maintain. At this point, the management should take the help of a third party that will provide quick and accurate business advice to properly maintain your business.
Good accounting practices will help the business to go a long way and will create a better future for the business. If you are looking for assistance in the matters of accounting of a company, then JAXA Chartered Accountants will be able to help you.
JAXA is a reputed Accounting firm wand will provide quick and reliable information about your company. The experts at JAXA also provide various other services such as Auditing Related services, Tax Related Services and many more. For more details on the services Contact Us. We will be happy to provide assistance.