A business is a human endeavor that starts with a vision and ends with profit. In order to achieve the ultimate purpose of any business, it needs to constantly grow, expand, and operate at a high rate. And, unfortunately, business owners often overlook accounting and the accounting process. But the importance of accounting in the overall growth of a business should not be underestimated. Accounting or accountancy is essentially the analysis, processing, and communicating of financial and non-financial information about corporations and businesses. It includes preparing the business’s balance sheet, budget, and reports regarding specific financial activities.
The purpose of accounting is to record the financial transactions of a corporation or business. The term “accounting” comes from the Latin phrase – acumen is – which means “acumen well-versed”. As such, accountants perform the duties needed to collect, organize, record, and communicate all transactions of the business. In simple terms, accountants are involved in the financial reporting and control of a business. Their role is quite similar to the managers of a firm in the sense that they are responsible for analyzing the performance of the company.
Generally, accountants prepare financial statements that summarize all the information regarding the company’s business transactions, including income and expenses, assets, liabilities, and stock ownership. These financial statements are essential for the evaluation of the business’s performance. The information is then presented in a report filed by the owner or manager of the company to the public or to the members of the accounting management. In general, public accounting systems give information on the operation of the company as a whole as well as individual units within the business.
Apart from the preparation of the annual financial statements, accountants are also involved in the preparation of the tax returns. Public accounting systems generally provide templates for the tax return and for the preparation of the individual tax returns. However, certain accounting systems do provide customized options for tax return preparation. Accountants who specialize in preparing business tax returns also make sure that the process complies with all the necessary rules and regulations of the government. They ensure that the preparation complies with all the applicable laws, including those governing state tax laws.
Another important job of the accountants is to monitor the business’s cash flows and to maintain and update the balance sheet. The most common method used to measure the financial position is the GAAP (Generally Accepted Accounting Principles). Under this system, the accountants determine the business’s net income or profit. They include all the expenses incurred in the business and its net income or profits. They also take into account the net income or profit of the owner or the manager of the company.
Now let us move on to the more complex side of the profession. As compared to the basic accounting, the technical aspect of the job can be quite demanding. This is where the accountants with technical knowledge supplement their professional knowledge to earn a good salary. To meet this challenge, many accountants study further degrees in accounting. These students study accounting using different methods like micro, macro, and bio-taxation, financial reporting, financial analysis, economics, and other related subjects.
The bookkeeping profession is highly specialized and requires highly specialized accountants who have the skills and knowledge to comply with the accounting regulations. The job of these accountants includes preparing financial statements, preparing accurate ledgers, preparing and interpreting the reports generated by the financial statements, analyzing the data obtained from the financial statements for accuracy and completeness, preparing the reports for investors, auditing the books and records for any suspected fraudulent activities, and communicating with clients. Apart from these, some accountants also work as consultants for large businesses. Most accountants start their career working as an assistant in a small business accounting department.
Apart from the regular bookkeeping work, some accountants also work as accountants for freelancers, contractors, and other professionals on specific tasks. In such cases, the work performed would be slightly different as the accounting systems may be slightly different. There are various books and articles on the subject of bookkeeping. One can easily buy these books and study the subject in depth to prepare a professional accountancy resume. After getting a degree in accountancy, you can find many opportunities available in the field of bookkeeping and can work in various firms or organizations.