Record Transactions
Having accurate and up to date records, which details all the money coming into the business which will be from the businesses sales, but also the money going out which is the expenses it costs to run the business. If these are failed to be listed, information could be forgotten or not paid. This means the business is unable to report its financial performance accurately which will therefore make tax payments wrong, which could then lead to legal issues.
Monitor Activity
Updating financial reports on a regular basis is important as it generate a clear picture of everything going in and out of the business. This also outlines any activity which could be rising or decreasing. This also means monitoring day to day funds in the account, to guarantee everything is being paid when it should be and the correct amount.
Control
Business gain more control over the accounts if transactions are maintained and monitored. This also allows actions to be put in place to take control the balance between money flowing in and out of the business.
Management of the Business
A manager is responsible for planning, monitoring and controlling resources; staff, stock, money, materials etc. This means taking on responsibility of managing the business accounts, but also making informed decisions and plan for the future. Also guaranteeing that enough funds and balance sales and outgoing cash.
Measurement of Financial Performance
Without measuring profit or loss, there would be no debt control within the business. This would mean falling behind on payments or loosing track of repayments. There are different types of profits that need to be calculated to give an accurate and up to date record, which will give an end result on whether the business is succeeding or failing. o Gross Profit- This is the money left after the costs of producing/buying the goods/services
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