Posts Tagged ‘Accountancy’
The importance of accounting in a company or business is to provide information on a company’s financial results or business and its position. This information is usually shared with shareholders.
Accounting is the art of analyzing a company’s financial situation up through sales, purchases and expenses. These records must be kept in chronological order.
Now that we have begun to understand what accounting can begin to examine the importance of accounting in business.
Accounting is important because it is useful in any work area or business sector.
For example, a secretary makes use of accounting data in the management of a company. Also the same company executives must be able to analyze the success of your business by analyzing the financial statements of the past and present.
We need accounting because it is the only way for companies to grow and flourish. Accounting is the backbone of the business world.
The main use of accounting is to record all financial transactions of a business (expenses, purchases, investments) to prepare financial statements and present such information in an orderly manner to third parties.
Users of accounting, third party:
Partners or Investors
Government entities
Financial institutions or lenders
Shareholders
Suppliers
Consultants, advisors
Partners or investors.
When we convince them to invest or be part of our business or company.
Government entities
Accounting is required when filing taxes.
Financial institutions such as banks and lenders.
When seeking financing.
Shareholders
When we want to acknowledge the financial performance of the business.
Provider.
When we get more comfortable priced raw materials or seek to obtain larger loans.
Consultants, advisors.
When we need to show financial information and thus experts advise it on how to improve the business.
Accounting information is useful for proof of competitiveness, profitability and productivity of a company to all traders.
Accounting is useful both internally and externally. Internally we can know the current status of the company and compare it to an earlier period.
Externally, as we realized serves to provide accurate information on a company’s financial condition and based on that information to get loans to accelerate business growth.
Posted in Business Innovation | 
Tags: Accountancy, business, Company, Financial institution, Investment, Investor, Uses of Accounting in a Business | 
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Definition of Management Accounting easily explained
Management accounting or management accounting is the reporting process with timely and accurate financial information required by business managers to make management decisions on a daily or short term.
Unlike financial accounting that generates annual reports, management accounting produces monthly or weekly reports.
These reports tend to show how much cash available, the revenue generated by sales, the amount of back orders, status of accounts payable and accounts receivable, debts, inventory of raw materials and may also include trend graphs and other statistics. All this is known as management accounting.
Managerial Accounting Objective
One can say that the main objective of management accounting is to provide financial information to senior executives of a company so they can make good decisions and sound for the fulfillment of goals.
