I agree with you, start with what you have than borrowing to start then be in a big debt.
This explains debit in business
- Thread starter Starmix
- Start date
The worthiness of any business can be determined by the status of its accounting. That is it is said that the accounting department is the powerhouse of a business and this is sector that must be handled by qualified personnels.
Anybody who keeps on compounding debit in business may face a lot of financial crisis on the long run. That is why you need to know how to manage your finances well as a business person.
Some people don't care compounding debts. They are found incurring additional debts over debts. Is that not why some government ran into foreign debts when they are yet to offset the outstanding debts before they apply for fresh ones from the foreign creditors?.
Anybody who does not care about compounding debt will actually run into crisis. Yeah, some countries also face financial and economic crisis because of that.
It is the opposite of a credit. When a business purchases goods or services, the cost of those goods or services is recorded as a debit in the company's accounting records. This increases the company's expenses, which in turn decreases its profits. Conversely, when a business receives payment for goods or services, the amount received is recorded as a credit in the company's accounting records, which increases its revenues and profits.
It is better to manage the debt in a business so that it will not boomerang.
As long as it is very important to avoid debts in businesses, there are also some successful business people that started with loans. They were able to run the business consistently to make it successful.
It is going to be very difficult to manage the business finances without an accountant, which is why it is one of the vital roles in any business organisation.
Definitely, even Small business ventures are now employing accountants because they are always going to monitor every financial transaction in the business venture. Employing accountants a very good for the sake of accountability.
Those accounting technicalities, I don't understand. The only thing I know is that you need an accountant if your business has reached a certain level. Small businesa accounting can be comfortably done by the business owner.
A small business venture does not need any accounting officer because that will probably cost them more money. The business owner can comfortably do that or his own to reduce the cost of running the business.
- Thread starter
- #34
That's so true then the accountant has the ability to reduce the accountability of the business owner, thus allowing him to pay his business tax using the manipulative entry. That's intended for tax payment.
It is very important and imperative that a company or business organisation must have a professional accountant. Without proper plans and accountablity, no business can survive. Some selfish business always consider employing an accountant as a waste of money but is a very wrong.
- Thread starter
- #36
Every business there is am accountant to do the debit and credit. An accountant is licenced and skilled in accounting works and services. Without an accountant a company cannot do the data entry to make balance sheets.
Definitely, the accountant is saddled with the responsibility of recording all the financial inflows and outflows in the business venture. They are very crucial to the success of any business that is why professionals are always employed.
business people should always do the necessary calculations before taking a loan to start a business. It is important to be experienced enough before taking such a decision.
There are so many ways you could incur debt in a business and it could come from mismanagement.
