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Keep track of cash flows
- Small businesses often have limited resources.
- Poor financial management will hence cause small businesses to fail.
- Keeping track of the business cash flow will help prevent business owners from over spending.
- It will also help with planning a feasible financial strategy, such as budgeting and projections.
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Evaluate business performance
- Reading financial statements of the company such as the balance sheet and income statement will give much insight into the well-being of the business.
- Owners can use the insights to effectively chart the way forward for their business.
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Provide investors with important financial information
- Investors want to know exactly why they should invest in your business, and they require hard facts to convince them.
- Accounting helps provide investors with the figures they require, and ultimately helps them make a decision on whether or not to invest in the business.