I need some help--Accounting?

I run a bookkeeping business helping many many small business owners and I can tell you exactly why bookkeeping and accounting help businesses. By keeping accurate records of your business, you can see if you are charging enough money for your products and services. You can see if your business is dying or surviving. You can see what you are spending your money on and where you might be able to cut your budget and make a bigger profit in your business. If you don't do this, you could be losing money and your business could go under without you ever knowing. You also need to know for tax purposes. The end result could be that you bankrupt your personal accounts trying to make the business stay afloat.

Lastly, if you don't do bookkeeping/accounting, the IRS will come audit your business and could end up fining you so much money, you personally go bankrupt.

Hope this helps.

Financial statements, the final product of accounting, reflects the potential of the company based on the past performance.

Example, the profitability of the company may impact the stockholders to invest more, thus may increase the purchase price of the stocks.

Accounting helps in the operational efficiency of the company. Expense records may identify points for improvements in the process and helps in defining key performance measures in attaining low-cost strategy.

Business owners determine the current status of the business by checking the financial position as reflected in the balance sheet. They would decide if they need to borrow or issue stocks. Borrowing terms may require a certain financial ratios that should be met which is based on financial statements.