Financial discipline is the hallmark of a business organization. Any institution involved in business activity or otherwise, should resort to accurate accounting of its financial transactions which not only bestow credibility and integrity of the organization, but ensure transparency and clarity.
Financial discipline can be achieved by implementing a good accounting system which is manned by efficient and knowledgeable accounting staff. This should be supplemented by an excellent internal control system which should be capable to identify accounting weaknesses and augment for its inadequacies and shortcomings. Prudent policy decision making should complement them. Accounting firms, especially Chartered Accountants have a vital role to play in its implementation and in its enforcement.
A good and perfect accounting system will be able to portray an accurate picture on the quantitative details of the organization. Regular MIS reporting helps the management to identify wasteful expenditure, locate fraud and error, compare figures with Industry benchmark, etc.
Those who are involved in these activities should be proficient in the subject and skilled in its implementation. Organizations, which are well equipped with the above mentioned factors, always move forward in a well planned and organized manner. Such organizations can overcome various business barriers like potential material scarcity, economic recession, Government and bank regulations, etc.