In the words of a layman, accounting can be referred to as the comprehensive and systematic recording of financial transactions related to any type of commercial organization. Scott Tominaga mentions that accounting also involves the process of summarizing, analyzing, as well as reporting these transactions to the various tax collection agencies and oversight agencies. All businesses need to maintain systematic accounts in order to realize their best possible profit prospects. Accounting has quite a crucial role to play in aiding the management of a company to be able to properly ascertain the financial position of a company.
Scott Tominaga discusses what makes accounting an indispensable element of businesses
The prime aim of companies of all scale, sizes, and sectors is to make a good level of profits. Properly allocating the revenue of the firm plays a crucial role in defining the overall profit prospects of the business. Systematically allocating and investing the revenue sum of business would influence its long-time continuity. Scott Tominaga mentions that this is where the process of accounting comes in. In addition to providing a record of all the financial transactions of a business, it also helps in ascertaining if the revenue sum of the company is being orderly allocated or not.
For any type of enterprise, it is crucial to have a degree of awareness about its various liabilities and debts, in addition to their profits and assets. This information helps in ensuring smooth business operations. People can easily find such details in the accounting books of a company. Accounting plays a major role in indicating the overall financial position of an enterprise.
Scott Tominaga says that there are several elements and aspects that manes accounting an indispensable element of any type of business. Tominaga has been involved in the field of accounting for several years, and hence is a good candidate to talk about this topic. He underlines the fact that accounting significantly aids people to efficiently plan for their business growth and development. No business plan can be properly made without acquiring all important financial data and information about a firm. Diverse types of business plans, whether they involve the formation of certain development relationships or are related to the purchase of important assets, would require proper and accurate information about the financial standing of the commercial organization.
In case there is no kind of systematic accounting process at a place at a business, it would become extremely problematic for the organization to have an accurate idea about whether they are incurring loss or profit. The overall accounting outcomes of any kind of company would have a crucial role to play in enabling its management team to take steps towards finding and identifying ways that help the business to make maximum profits. These outcomes would also aid businesses to develop plans that make sure that no kind of further losses is incurred by it. Due to the high importance of this process, almost all major companies have an expansive accounting department.