Why Accounting is Important for Business Growth?
                     Why Accounting is 
Important for 
Business Growth?
Accounting plays a crucial role in running a business. It 
assists the business in taking important decisions. The 
summary of all transactions made by the business in a 
year or a period of time, arranged in an orderly set of 
financial statements, can help you see what is going on 
in a business clearly.
The financial statements can also help a business see 
the results of previous decisions taken by the business 
owners and how these decisions impacted the 
business. Thus, it is paramount to have a basic 
understanding of accounting for growing your business. 
If you want to learn the basics of accounting then it is 
recommended that you sign up for an 
Accounting Certificate Course in Ahmedabad from 
Super 20 Institute or any city of your choice.
Now, before we jump into why accounting is important 
for business growth, let us first take a look at what 
accounting is.
Accounting is a detailed systematic recording of the 
financial transactions of a business and financial 
statements are formal written records of a business’ 
position and financial activities.
The three chief financial statements made by 
your records are:
1. The income statement that informs you about the 
profit and loss.
2. The balance sheet gives you information about the 
financial position of your business on a particular 
date.
3. The cash flow statement informs about the cash 
generated and spent during a particular period of 
time.
Here are some reasons why accounting is 
important for the growth of a business.
For Evaluating Your 
Business’ Performance
Accounting maintains a record of expenses, gross 
margin, and possible debt. This helps to give you a 
better understanding of the result of operations of your 
business as well as your business’ financial standing. 
Simply put, it helps you to see a clear picture of what is 
going on in your business from a financial point of view 
and this allows you to evaluate the performance of 
your business by comparing your current accounting 
records with your previous accounting records.
Helps in Conforming to 
Government’s Laws and 
Regulations
There are various government laws and regulations 
that a business has to comply with otherwise it can 
face penalties. Most of these laws involve accurate 
reporting of financial transactions. Accounting helps 
you to accurately record the financial information as it 
records these transactions in a systematic manner. This 
makes it easier to verify revenues, expenditure 
liabilities, and assets. Thus, in this way, accounting 
helps in ensuring statutory compliance.
Budgeting and Future 
Projections
Accounting helps in budgeting and predicting the 
expected revenues and expenses. You can compare 
your current accounting records with your previous 
accounting records and allocate the budget accordingly 
and this will also give you an estimate about what 
revenues and expenses you can expect to incur in the 
future. 
Business trends and projections are formed on previous 
financial information to make your operations incur 
profits and this financial data will only be appropriate if 
it is recorded in a systematic manner through 
accounting.
Filing Financial Statements 
is only possible through 
accounting
Accounting plays a major role in the filing of financial 
statements of a business with the Registrar of 
companies as well as for direct tax and indirect tax 
filing reasons. Thus, filing financial statements is only 
possible through accounting.
Accounting is important for 
getting loans and 
investments
Investors and lenders never invest in a business 
without having any information about the profitability 
of a business. To obtain knowledge about this, they 
require financial statements of your business.
Thus, without maintaining accounting records of your 
business you would not be able to find investors for 
your business and as a result, your business will not 
grow.
Conclusion
Maintaining accounting records of the financial 
transactions of your business is of utmost importance 
for the growth of your business. It is crucial for big as 
well as small businesses to maintain a systematic 
record of their financial activities so that they can 
evaluate their performance and formulate profitable 
strategies for the future. Learning Accounting or 
GST course in Ahmedabad from reputed institute is 
important in order to comply with the government’s 
laws and regulations. You might miss out on getting 
investors to invest in your business if you do not have 
accurate accounting records of your business.
Article Source
https://techashton.com/why-accounting-is-important-for
-business-growth/
Super 20 Training Institute
www.s20.in 
+91 7069 646028
Address
205, Narayankrupa Square, 
Opp. H K Commerce College, 
Gandhigram Railway Crossing, 
Ashram Road, 
Ahmedabad – 380009