Small, medium, or large — it doesn’t matter on which scale you are running your business. As long as business transactions are being done, the need for accounting is bound to arise.
Although there are a heap of reasons substantiating why your business cannot do without accounting, some of the rational ones are mentioned below:
a. Generating financial statements and reports
Business growth also depends on the analysis of the financial statements and reports prepared by the Company. And analysis of these statements and reports is possible only with the help of the accounting data collected by the Company.
b. Retaining information about the dues
Having proper record of the receipt and dues is also necessary; otherwise it will lead to mismanagement of the exact amount due or received.
c. Record of all the nitty-gritty business transactions
What if any sort of problem pertaining to the business transactions so done arises? Accounting alone can help the business overcome this problem by keeping a record of all the nitty-gritty business transactions.
d. Legal necessity (filing corporate tax returns)
Other than the basic reasons justifying the need for accounting, it is also a legal necessity to maintain a book of accounts since the business needs to file corporate tax returns as a part of its legal responsibility.
e. Tracking income and expenses
It becomes extremely important to keep a track of the incomes and expenses of the business, without which the business will lose trail of the total amount of revenue earned and the total expenses it has.