What to Benefit from Accounting on Companies
Accounting is an interesting discipline whose practice is highly recommended among companies irrespective of the nature or model of the business. Quite a lot of benefits accrue to this practice because of the fact that accounting enriches businesspersons with knowledge that is essential in the daily operation and running of their businesses. In essence, the accounting field is financially oriented in that it helps the management to oversee their financial management practices, and hence to efficiently manage their resources (Pratt, 2010). Certainly, through accounting, a company is able to tell where it is coming from and where it is heading. Notably, most if not all successful companies keep updated accounting records to enhance, and uphold a good accounting culture and performance in the quest to realize their goals and objectives in the business world. This essay presents a proposal that highlights the benefits from accounting on companies while explicating associated essential elements.
The exploration of the aforementioned knowledge area is worthy because it creates a link between class work and real life experience, especially in the business environment. It makes students appreciate their class efforts specifically in the accounting field to be able to recognize the importance of learning various accounting elements that are applicable in real life situations. Besides, an exploration in this knowledge area allows the students to realize that the knowledge of accounting is critical in making sure that managers make wise decisions as regards to the future of a company (Uddin & Tsamenyi, 2010). This is because accounting based decisions covers a wide array of areas, ranging from expansion to correct pricing decisions. Therefore, accounting based decisions enhances good decision-making in a bid to avoid financial disasters that could prove detrimental to the future of the business. Ideally, accounting based decisions act as the backbone of businesses, allowing them to make correct forward steps that do not compromise with their financial position and hence ultimate failure (Uddin & Tsamenyi, 2010). A vast knowledge from this area will also serve as a source of encouragement to businesses and businesspersons to provide credible and reliable information that they can use to up their business endeavors for a successful financial plan and execution.
The proposal’s research question seeks to understand why companies need to encourage accounting practice in their business activities. Some companies do not see the need to encourage a good accounting culture in their businesses due to various reasons, such as the costs associated with the practice. Others who practice it do it because they are bound by law to do so while other companies keep updated books of accounts in a bid to encourage a good accounting culture for the benefit of the business and its sustainability. Notably, companies with poor accounting practice experience a lot of financial turbulence here and there because of inability to handle their cash flows and lack of knowledge regarding the benefits that it will reap from a good accounting practice (Pratt, 2010). On the other hand, those with good accounting practice are able to track the financial flow of their resources in and out of their business and thus ensuring that the business is heading to a desirable direction. A significant number of studies in this area reveal poor performance among companies with poor accounting practice as opposed to companies that encourage otherwise. This triggered the development of the research question in a bid to have a better understanding of the accounting, as it applies to companies and businesses (Uddin & Tsamenyi, 2010).
The scope of the study will be limited to a manageable number of companies that have a good accounting culture as well as those with poor or no accounting policy in their businesses. The study will collect data form line managers covering various departments within the selected areas and companies of studies, which will include financial managers, production managers, and marketing managers among others. Essentially, the research will cover ten identified companies that fall under the aforementioned categories of the research with an equal share on each category, whereby research questions in form of questionnaires and oral interviews will be the primary techniques for gathering information during the study. The desired outcome of the research is a well-organized report that details and explicates the benefits that accrue to companies that encourage a good accounting practice as part of their business activities, as contrasted with those that do not encourage accounting culture in their management activities (Uddin & Tsamenyi, 2010). As such, the research will be beneficial to those companies that will be able to access and ascertain the truth behind good accounting practice for the benefit of their businesses.
In conclusion, numerous benefits accrue to companies due to good accounting practice. Accounting provides a good platform on which a company can profitably operate their business activities basing their operational decisions on the accounting information available. The essay has explicated that indeed, the knowledge based on this area is worth exploring because it provides profitable alternatives and easy ways to drive a company to desirable heights.
Pratt, J. (2010). Financial Accounting in an Economic Context. New York: John Wiley & Sons.
Uddin, S., & Tsamenyi, M. (2010). Research in Accounting in Emerging Economies, Volume 10. London: Emerald Group Publishing.