Unit 2 : Who uses accounts and why?

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Accounts are widely used by many groups and for many reasons; you may be able to add to these lists.

Users of accounts

  • Owners / Shareholders – to value their investments
  • Managers – assist in control and decision making
  • HM Revenue & Customs – agreeing tax liability
  • HM Revenue & Customs – agreeing VAT liability
  • Central statistical office – official statistics
  • Investors – to oversee and/or value their investments
  • Banks – to oversee and/or value their investments and loans
  • Customers – can I rely on my supplier?
  • Suppliers – will I be paid?
  • Auditors – the figures to be audited
  • General public / Journalists – public interest issues
  • Trades Unions – negotiations / industry data
  • Employees – information on what is happening to the business they work for?
  • Potential employees – safe to work for?
  • Pension funds / Fund managers – for potential investment
  • Lobby Groups – to review and further their issues
  • Authors of books on the subject – for materials and examples

Uses of accounts

  • Showing the financial situation of the entity
  • Demonstration of compliance to the law
  • Reporting performance
  • Managing performance
  • Valuing an entity
  • Demonstrating resources available
  • Demonstrating capacity to do things
  • Comparisons and benchmarking
  • Support for raising finance
  • Demonstration of probity
  • Supporting tax computations
  • Keeping investors (including banks) and potential investors informed

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Customer Quote:
"When I log into Liberty it immediately lets me know which client accounts are due or coming up for payment."

Mary Palmer – Mary Palmer Consulting