Let’s first understand the importance of accounting before we delve into the specifics of the choices that any business has.

Whenever anyone ventures out to start any business, there are three primary reasons:

a)     Make profits

b)     Grow to a global level

c)     Give back to society by way of employment & revenue by way of taxes & duties

In all the above three reasons, a business is helped by accounting to not only know where the business stands vis-à-vis the goals, but also helps the business in taking measures to achieve the goals faster & in a better way.

But how does Accounting do this?

a)     By making sure that all the transactions that the business is entering into is recorded in a timely manner

b)     Ensuring that all such transactions are grouped under the correct account heads

c)     Ensuring that the profit & loss account and the balance sheet along with other reports like the Cash Flow Statement, Funds Flow Statement, Debtors Ageing report are prepared in a timely manner & presented to the owner for taking the right actions

Given the importance accounting has on business, it is natural that businesses the world over consider accountants very critical. Probably that is the reason why a CFO goes hand in hand with the CEO of a company.