Properly allocating its revenues and maximizing its profit opportunities are some of the most important goals of all business organizations. Even though the key function of all commercial firms is to make the maximum amount of money, their core functions usually extend to systematically allocating and investing the revenues as well. Scott Tominaga says that the maintenance of systematic records of such events can also be quite crucial for a company as it may be needed for its future use.
Scott Tominaga offers an insight on the need for good accounting in businesses organizations
Accounting is the process with the help of which systematic records of all the financial transactions of a business are kept. It involves the comprehensive analysis of various types of business transactions that involves money, and is often required by tax collecting officials, and other supervising agencies. Scott Tominaga further highlights the fact that accounting is an ongoing system that largely focuses on evaluating and indicating the financial standing of a company. Mr. Tominaga has worked as a Chief Operating Officer in a renowned firm, as well as has the experience of being an accounting professional. Hence, his experience in the corporate world makes him a good candidate to talk about the domain of accounting.
Here are a few points marked by him that highlight the importance of accounting in business organizations:
- Competent and systematic planning: Without proper planning, it is almost impossible to ensure the success of any management function. Whenever making a business plan for a company it is crucial to make sure that all the crucial and relevant financial information are available with people. Accurate and detailed information about the financial position of the business is vital for making a number of important business plans, no matter if it is related to forming long term development relationships or procuring any asset.
- Financial Motivation: Without a systematic accounting process, it would be close to impossible for a company to understand whether it is incurring profits or loss in its operations. The outcomes of the accounting process significantly aid the management of a firm to take all the steps necessary to augment its profit opportunities, while also making sure that no further losses are suffered by the firm.
- Facilitates superior co-ordination: All companies should work like a well-oiled machine to enjoy superior success. Coordination between diverse departments in a company ideally goes a long way in making sure that the firm is able to run in a smooth fashion. The accounting department of a firm is one of the key factors that facilitate smooth coordination in an organization, and helps ensure their optimal profitability. Proper accounting is needed to adjust expenditures with income, and purchases along with sales.
Scott Tominaga underlines that it is crucial for all businesses to be well aware of its diverse debts and liabilities, along with the profits and assets, in order to run in a stable and smooth fashion. It is crucial for companies to have a systematic record of their financial data.