Though accounting is a support function it demands high importance in an organization… I remember this famous quote said by Rich Dad to Robert Kiyosaki
“You accounts statement shows there is cancer in it”
In the book Kiyosaki states “when he met Rich Dad to get his advice on the position his business, what Rich Dad asked was for Accounts Statement and reviewing the accounts statement he said Kiyosaki that there was Cancer in his company”. What Kiyosaki means is a company’s position can be read from its accounts.
Likewise a promoter needs proper accounting systems and practices to reap the benefits of all the hard work he has put into his entity… Companies like Worldcom, Enron, Satyam and many more unheard stories have fell down because of accounting irregularities…
Accounting reports are very important and an entrepreneur needs it to take strategic decision… Without an Account’s Report most of the decisions taken can’t be accurate and can prove a costly mistake…
Also we need to Account’s reports and projections when we apply for a loan or approach PE’s or VC’s for funding… But this support function has mostly been sidelined by many promoters and by the time they realize their mistake, it would have been too costly…
So, I recommend entrepreneurs to give high importance to Accounting function’s and hire a experienced Accountant and gain control from the beginning… If you are unable to afford an experienced accountant you can outsource the support services where in you get the same advantage and still have control…
Let me consolidate some points and make a brief…
- Accounting reports helps in strategic decision making…
- Analyzing and reviewing performance of company’s growth…
- Need these reports to apply for loans and for approaching VC’s & PE’s for funding
AnandNataraj 