An accountant goes over the bookkeeping records of a business to find out how much the company is actually worth, and how much money it is making, and (very often) how it could make more money. His profession is called accountancy, or, more often, accounting. The first step in accounting is bookkeeping (and there is a separate on bookkeeping in a later volume), but accounting only begins there. The Barrie Accountant sets down the figures that show how much money a business has taken in and how much it has spent, but the accountant tells what the statistics mean.
The general public would not invest in a big business unless it had a system for proving that their money was being spent wisely. All manufacturing, banking, and business depend on proper accounting. Counts provided this system.
Big company with dozens of branches and thousands of employees would be in a constant mess if it were not for accounting systems to show precisely how its money was being spent and with what success and accountants worked out the system for that too.
For many years head of Corporation, one of the biggest businesses in the world, once said that good accounting is the backbone of the successful business. Accounting is a profession, which means that the person who practices it must have special education. An accountant must know much more than bookkeeping.
He must know the principles of analyzing bookkeeping records —that is, taking every separate item and discovering exactly what it means. He must know a great deal of law as it applies to businesses, especially tax laws and laws relating to an employer’s duty to his employees.
Sound business practices require attention to many different areas:
** To raise capital for the new or start-up business.
** Record keeping to manage the day to day business transactions.
** Cash flow control to know how much activity is having capital.
** Budgeting to forecast the future.
** Credit management
** Insurance the business for theft, loss or fraud.
** Future money for expansion.
These are the company’s liabilities. The difference between the assets and the liabilities is the company’s net worth. This balance sheet, or financial statement, shows a company’s net worth on some particular date that is the end of a The accountant prepares a “financial statement” or “balance sheet” to show how much a company is worth, but often it is hard for anyone but a businessman to understand it.
The accountant shows the result of business operations by what is called a balance sheet. A balance sheet is a division into two parts. In one section is shown everything a company owns, whether in money or in things that are worth money. These are its assets. In the other part of the balance sheet, the accountant sets down everything the company owes, or must eventually be prepared to pay.
Accounting is essential for every business to maintain proper records to know how much cash is flowing in and out of business. An expert accountant has in-depth knowledge and expertise to manage the finances and resources available in the industry correctly.
The business finances must be well maintained to know if the business is earning profit or loss. If the company is winning loss, then decisions must be taken to reduce the expenses and increase selling cost. A trained accountant help to keep track of day to day money related transactions.
Business finances if not recorded in proper order can prove a difficult task to handle during tax season. It is a lot of work to keep up with every receipt, invoice, and payment throughout the year, but being organized and prepared with financial records is one of the most critical tasks.
To keep the finances in a well-organized manner plan ahead. Prepare budget and forecast the available resources and the business expenses. There will always be business issues that need to be addressed today, but when it comes to your finances, you need to plan for the future. Check and monitor the tax records for the tax season. Record day to day business transaction to avoid last-minute tax calculations. If you have trouble saving for your quarterly estimated tax payments, take help from companies who offer Tax Returns Services for preparing tax documents and return your payable tax from the government.
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