Benefits of Having Proper Financial Accounts in a Company Operating In a Competitive Market

Benefits of Having Proper Financial Accounts in a Company Operating In a Competitive Market

There are various benefits associated with capacity of having accurate and timely financial account in a company that is growing in a competitive way. Within a competitive market, it is clear that a company is expected to have accurate accounting. Basically, proper accounting and book keeping in a company is important (Vernimmen et al., 2014).

First, accurate or proper accounting in a company assists in understanding of the firm financial status. In reality, overall financial status of a company operating in a competitive market is presented in the quality of financial accounts. Three significant financial accounts or statements are the income statement, the balance sheet, and the cash flow statement. These financial accounts are relevant when it comes to making proper decisions and changes in a particular company policy as well as in implementation of strategies that assists in achievement of objectives (Brigham et al., 2016).

Conversely, financial accounts are beneficial to a company operating in a competitive market as it assists in creation and control of budget. In this case, the business managers will use financial accounts in knowing the amount of dollars that are gained and those expensed which ensure better monitoring of the firm budget. Financial accounting in such firms ensures that the business is headed in the right and expected direction (Vernimmen et al., 2014). On the other hand, financial accounts of a company operating in a competitive way assist in forecasting future revenue. Business owners who consider the financial accounting remains informed and in a better position of forecasting revenues for the company. Revenue forecasting assists in understanding of whether the firm current marketing strategies are efficient or there is the need for changes. When a company fails at forecasting revenues, it is hard to understand if it is safer making the business-related expenses (Brigham et al., 2016).

Also in the realm of expenditures, accurate accounting assists the business managers in considering the consequences involved in major purchase decisions. For instance, in a purchase of new properties and other major expenses, there are significant impacts on the company cash flow (Brigham et al., 2016). However, with close monitoring of the company financial accounts, a company operating in competitive market can be able to make informed decisions when making purchases of new assets and properties. Financial account assists business managers in tracking the business expenses. Aspect of monitoring the business expenses is crucial part of the company. Over time, there may be little expenses adding up where business owners will have capacity of tracking the expenses on their operations (Vernimmen et al., 2014).

Company operating in a competitive way entails the need to have accurate financial accounts. Financial accounts and records assist in making corporate decisions. It assists a company that is growing in understanding when to add more staffs, when to lay-off some staffs (Brigham et al., 2016). Such instances may mean a difference and capacity of having profitable periods and loss periods. With proper financial accounts, the business will understand the amount it is spending on the payroll and get prepared when setting growth path and decision for the company.

Finally, the capacity of monitoring the company growth within a competitive market is a major benefit of having detailed financial accounts. With proper accounting, a company is able to know the asset values and revenues, making it easier for tracking company growth (Vernimmen et al., 2014). A company within such market will use financial accounts in knowing whether sales target are met, whether content marketing strategies are effective, and whether the payables and receivables commitments are met.


Brigham, E. F., Ehrhardt, M. C., Nason, R. R., & Gessaroli, J. (2016). Financial Managment: Theory And Practice, Canadian Edition. Nelson Education.

Vernimmen, P., Quiry, P., Dallocchio, M., Le Fur, Y., & Salvi, A. (2014). Corporate finance: theory and practice. John Wiley & Sons.

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