Talent Development for Training and Consultations

Why Is Accounting Important?

Accounting plays a vital role in running a business because it helps you track income and expenditures, ensure statutory compliance, and provide investors, management, and government with quantitative financial information which can be used in making business decisions.
There are three key financial statements generated by your records.

The income statement provides you with information about the profit and loss

The balance sheet gives you a clear picture on the financial position of your business on a particular date.

The cash flow statement is a bridge between the income statement and balance sheet and reports the cash generated and spent during a specific period of time.

It is critical you keep your financial records clean and up to date if you want to keep your business afloat. Here are just a few of the reasons why it is important for your business, big or small!

It Helps in Evaluating the Performance of Business

Your financial records reflect the results of operations as well as the financial position of your small business or corporation. In other words, they help you understand what’s going on with your business financially. Not only will clean and up to date records help you keep track of expenses, gross margin, and possible debt, but it will help you compare your current data with the previous accounting records and allocate your budget appropriately.

It Ensures Statutory Compliance

Laws and regulations vary from state to state, but proper accounting systems and processes will help you ensure statutory compliance when it comes to your business.
The accounting function will ensure that liabilities such as sales tax, VAT, income tax, and pension funds, to name a few, are appropriately addressed.

It Helps to Create Budget and Future Projections

Budgeting and future projections can make or break a business, and your financial records will play a crucial role when it comes to it.
Business trends and projections are based

The CFA Is the Most Prestigious Designation in Finance and Investment
First, if your goal is to invest professionally, then you are already aware of the reputation of the CFA Institute (CFAI) and its charterholders. No other professional designation carries the same weight for asset managers and other financial industry participants. A CFA designation provides the most value for research analysts and asset managers. These professionals are involved in portfolio management, pension funds, hedge funds, and fund of funds. Finally, they may also work in private banking and financial advisory.

Jobs That Need the CFA
For these professionals, the CFA title is almost a must. Pursuing a career in these roles without a charter is similar to trying to practice accounting without a CPA.

Therefore, if you fall into one of the careers above, it should be fairly straightforward for you to answer the question, “Why earn the CFA?”

Similarly, professionals who work with people in financial roles are also interested in the CFA charter. Professionals outside of the typical finance roles are attracted to the CFA because it allows them to broaden their knowledge. Even more importantly, this designation helps them stand out from their peers. These professionals include accountants, auditors, lawyers and senior management in operations. Financial firms are seeing the value of having CFA charterholders in other areas outside their trading desks.

CFA Careers
According to CFA Institute statistics, these are the most popular careers among CFA charterholders:

Portfolio managers: 23%
Research analysts: 16%
Chief-level executives: 7%
Consultants: 7%
Risk managers: 6%
Corporate financial analysts: 5%
Financial advisors: 5%
Relationship managers: 5%