Final accounts – an understanding – The need
In the last upload, as shared in the Learning & Development group, I had shared the importance of basic concepts of financial / final accounts.
What is really the need for you to understand final accounts and their implications?
- Money makes the world go round – it’s an old saying, and so very true. Our personal and professional lives revolve around money and finance.
- One of the biggest obstacles that hinder the growth of managers today is their inability to judge the financial strength of their strategic inputs. This handicap results from a lack of financial background.
- The ability to assimilate financial data is an invaluable asset in your career. It helps you identify and analyse business opportunities, assess financial risks and most importantly, evaluate your own ideas through a financial lens.
- You need to understand about the financials of the organization, so that you are empowered to make calculated decisions. You need to understand the costs and revenues and how it impacts your work and the organization as a whole.
- You need to play a strong role in helping the organization manage its resources, quite often limited.
Various users / government bodies / stakeholders need financial information to maintain control, an eye on the taxation, social protection and an accountability of various business / non-business entities towards the populace at large.
The Accounting profession has attempted to develop a set of standards that are generally accepted and universally practiced. These differ from country to country. They are known as the “Generally Accepted Accounting Principles”. In view of the global reach and the multi-country / continent spread of various business and social entities, there are attempts to build a universally acceptable set of procedures, through the IFRS implementation as well.
If you want to manage your own affairs, you need to understand your financial layouts, work towards enhancements of the same. You may have funds for investment, you may be considering joining a new company, and to assess all that a reasonable understanding of final accounts / financial strength of the concerned entity would help you traverse a long way towards your goals and wellbeing…