The importance of accuracy

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  • Created by: sarp2004!
  • Created on: 01-02-20 09:09

The importance of accuracy

Advantages

  • To ensure the correct goods are delivered in the correct quantities to the right customer
  • To check that customers are not being overcharged or undercharged for goods
  • To ensure the enterprise has sufficient inventory (stock) to meet customer demand
  • To ensure calculations of costs and revenues are accurate
  • To ensure both enterprise and customer have a clear understanding of the terms of sale, including prices and delivery schedules
  • To enable the enterprise to accurately calculate the taxes it owes to the government
  • To allow managers to make strategic decisions

Disadvantages

  • If financial Documents aren't accurate:
  • Profits may be over- or understated
  • Not all costs are accounted for
  • Investors may lose confidence in the business
  • Reputation of the business can be damaged
  • Financial statements will not be accurate
  • It can lead to cash-flow problems
  • Suppliers and other trade payables may not be paid on time
  • Bad debts can increse

Evaluation

Financial documents provide a record of the trading and financial transactions taking place between the enterprise (the supplier) and its customers.All documents must be completed accurately.

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