The Role Of Accounting

Accounting has often been referred to the language of business. Why not? Because it is the owner, administrator, investors tell too much of the information necessary to assess the financial performance of companies. Because they are influenced by them, these people is a business-they're interested in its activities, it is all parties. In fact, the purpose of accounting is to provide financial information, is that the stakeholders to support better decision-making. Obviously, Do you run the tissue will not try to perform accurate and timely financial information without investment decisions, it is ready accountants this information. More importantly, the accountant, for stakeholders to make sure that you understand the meaning of financial information, they make it easier to use the financial information for them to deal with the problem on the business, personal It will work with both of organization and. In fact, it is the easy part to collect all the numbers, is, you have all that must be running your accounting software today. The difficult part is to analyze interpreting, and communicating information. Of course, you also need to present things clearly all while interacting with people from effectively discipline of all of the business. In any case, we measured now, and summarizes the business activities, and to interpret the financial information, management, and ready to define the accounting treatment as a process for transmitting the results to the other decision-makers are now ready.

The field of accounting

Accountant, usually working in one of the two major areas of. Management accountant, have they provide information and analysis to decision makers in the organization in order to help run it. Financial accountant, for they help to evaluate its financial results, to provide information to individual and groups both inside and outside to the organization.
In other words, management accounting, financial accounting, while you will understand well you are running it, you can keep your business running.

Management Accounting
Management accounting, has played an important role in the administrator fulfill its responsibilities. Information provided by it, because it is intended for use by a wide range perform human jobs, formats for reporting information is flexible. Reports can be tailored to the needs of the individual managers, the purpose of such a report is associated with to help form the administrator when performing the decision, to provide accurate and timely information thing. , Preparation analysis, and in the communication of such information, the accountant, organization personnel, operations, marketing, works with individuals from all functional areas of finance.

Financial accounting
Financial accounting, income statement, capital, balance sheet, summarizes the past performance of cash flow company, is responsible for creating a document that contains the financial evaluation report of the statement the organization of the current financial situation. In the preparation of financial statements, financial accountant, -the basic principles for financial reporting issued by the independent institutions, of rules called the Financial Accounting Standards Board (FASB) and generally accepted accounting principles, which is called (GAAP) It will not conform to the uniform set. Users, we want to ensure that the information that has been reported to them are accurate, I want to make sure that the financial statement has been prepared in accordance with GAAP. They are also, they know that you will be able to compare the statement that has been issued by one of the company to those of other companies       in the same industry.
Company headquartered in the United States, although in accordance with the US-based accounting standards, whereabouts many companies outside the United States, please follow the different sets of accounting principles, called the International Financial Reporting Standards (IFRS). It is issued by the International Accounting Standards Board (IASB), of these multinational corporate standards is not the same as the US accounting standards in several important ways. IFRS, for example, a little harsh about how you will be able to calculate the cost of inventory, we are not going to insist on unnecessarily in such fine distinctions. According to most experts, a single set of global standards, finally come out in order to dominate the accounting practices of both US and non-US companies, the fact that, however, please remember .

Who Uses Financial Accounting Information?

User identification of management accounting information, is easy to basically, they are the Company's management. We, in the users of financial accounting information, however, it is necessary to examine a little more closely, you also need to know a little more about what they should do with the information accountant is providing them.

Owners and Managers

Summarizes the results of the financial activities of the company within a specified period, financial statements, in fact, have reported the card for the owner and administrator. They are, and that the companies make a profit, whether or not had to or did not submit any other information about the financial condition of the company, for example, will be displayed. It also provides information that the administrator or the owner can be used to take corrective action.

Investors and Creditors

If you're lending money to friends in order to start a business, what not want to to know how that has been doing business? Investors and creditors, submit the money the company is required to operate, but not surprisingly, they will feel the same way. Because they know that it's impossible to make a smart investment and financing decisions without accurate report on the financial soundness of the organization, they evaluate the performance of the company, related to continued investment We studied the financial statements in order to make decisions.
The most successful investors in the world (and third-wealthy individual), according to Warren Buffett, the best way to prepare yourself that it is the investors, is to learn all the accounting that you can. Paying close attention to financial accounting, for the most part, Buffett, Berkshire Hathaway, chairman and chief executive officer of the investment firm to other companies (CEO), the net assets of $ 3.5 billion yen in forty years $ Turn the 10,000 yuan of investment, reports .John price he had to do it, "the return of Buffetteers,"

Government Agencies

Companies are required to submit financial information on the number of government agencies. For example, listed companies for the Securities and Exchange Commission, which are traded in the shares of stock (SEC), provides an annual financial report to the federal agency that regulates the stock transaction, which must be replaced,. In addition, companies, local, such as the Internal Revenue Service, state, and you need to provide financial information to the federal tax authorities.

Fact
Powerful accounting system, to create a successful small and medium-sized enterprises, is may be a difference between the application of bankruptcy. Small Business Administration (SBA) is, two thirds of new businesses, at least two years only 44 per cent, has reported that the past four years to survive. AllBusiness.com, Dan & # 038; Bradstreet company of the business, the lack of cash reserves, a waste when starting the poor accounting management, for the main reason that small and medium-sized enterprises fails bad, that it is a capital structure reported to have been.

Characteristic  

Small and medium-sized companies are using a mix of management and financial accounting and business management. Management accounting, create a budget for business functions, focusing on the allocation of the project cost of goods and services, to create a financial information for decision-making of business. Financial accounting, sales revenue of small and medium-sized enterprises, has created expenses, assets, liabilities, financial statements list the cash flow. Both types have been used to report financial results to ensure and business stakeholders of external funds.

Function  

Accounting information of the business owner, you will be able to evaluate the efficiency and effectiveness of its business. Financial statements, in order to determine how small businesses are doing, you can be compared to the industry standard or with major competitors. The owner of the business analyzes the future sales, in order to create a tendency for predicting, you can use the historical financial accounting statement.

Considerations  

Small business owners, in order to keep track of records, purchase a computer program of accounting software, you can report the financial information. Small or home-based small and medium-sized enterprises, in order to keep track of the financial information, but you can use a spreadsheet and other basic programs, specialized accounting software, business owners, accurate To helps to maintain such financial records. Computerized accounting system, too, can be calculated payroll taxes to employees.

Expert opinion  

Business owners can create accounting system of the company, please consider that you hire the accounting firm or individual certified public accountant to examine (CPA). To hire an accountant, often, it is expensive for many small and medium-sized enterprises. However, experience and expertise accountant is a valuable resource for running the business, it brings to the analysis of small business accounting. Small and medium-sized business owners, in order to prepare a business tax return, you can use these external accountant.

Control

More companies to grow, you can find it for you is difficult to keep track of the money. It is, he is especially if you have access to the company's account, enterprising of you want to cheat you, for non-ethical employees, it becomes easy. For example, suspicious patterns of drawers and salaries for nonexistent employees - A good accountant, you can find the warning signs that something is wrong. Accountants will also be able to establish a policy to reduce the opportunity for fraud.

Other users  

The number of other external users, have an interest in the financial statements of companies. Suppliers, for example, they need to know whether the company that sells their products you have to pay the bill of trouble, or there is likely to be at risk of going under. Other forms of salaries and remuneration, because that depends on the performance of the employer, employees and trade unions are interested.