Archive for February, 2021

Accountants And Accounting – A Brief Run-Down

February 6th, 2021

One of the most important parts of setting up and running a business is the Accounts department. Most self-employed people either do it themselves or employ someone to do the business accounts. In this article we cover some of the basic outlines involved in the accounting profession.

You will realise the vital part that a good a good account has in the running of a business. As a business grows it becomes apparent the importance of knowing the various types of accounting strategies required to run a successful business. When people first start their businesses, book-keeping and keeping basic records is all that is needed.

They record the day-to-day running expenses of the company. The sales made together with the expenses incurred making use of invoices, payment receipts, bank cheques and other general paperwork where transactions take place.

OK, So What Is Accounting All About?

A lot of people look at accounting as number crunching, something done by people who are ‘good at numbers’, they feel that it has nothing to do with them someone else can deal with that side of the business. There is often some amount of confusion when dealing with records and book-keeping.

But of course Accounting is a lot wider issue than merely just books. ‘Accounting is a system in a business that shows in minute detail the total number of transactions that business has, detailing each aspect in the form of reports which are then in-turn passed on to the people ultimately responsible for the running of the enterprise.’ Financial Statements are presented in the form of reports stating the exact financial position that an individual or organization.

Who Acts Upon This Accounting Information?

*Businesses,
*Individuals,
*Government Agencies,
*Tax Authorities,
*Investors and Creditors,
*Non-Profit Organizations and
*Other Users including employees, consumer groups, labour unions and the general public.

The Services Accountants Provide:

First of all there are two basic types of accountant.

1. Private Accountants- These work for single organizations.

They carry out tasks such as cost accounting, making a budget, designing information procedures, carry out internal auditing, financial and managerial accounts.

2. Public Accountants – These accountants serve the general public.

These type of accountants carry out services such as tax accounting, business auditing and general management consulting. Thus as small business owners the majority of their time would be taken up with the management and financial accounting of the business leaving little time to dedicate to the actual activity of the company – a big problem!

Financial accounting is also a source of information that people such as creditors and government tax organisations can use to see how the actual company is being run. Management accounting gives the actual owner of the company information as to the situation of the business from an operations perspective. Enabling the owners of the business to see the manufacturing costs of production and compare it with the income generated thus coming up with proper statistics that can be worked on and bettered in the future.

This article accountants and accounting is a general outline for guidance only, you should seek professional individual advice regarding matters such as this for the simple reason that laws and practices vary substantially over time and from country to country.