Complete Accounting Best Practices (Document Bundle)

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Complete Accounting Best Practice PPT

As an accountant, many tasks must be handled carefully. The main roles of an accountant are to identify, record, and report finances to those in need. Accountants must be able to prepare and analyze financial reports correctly and completely without the slightest mistake. If the financial records were recorded in error, the financial statements are not declared valid. The financial statements will be made based on a period which is usually made at the end of the month or the end of the year.

By doing financial analysis, the company can also find out and even state it as evidence of what income and expenses the business has made. From the income and expenses, bookkeeping will be formed in a business. Bookkeeping is very useful because it can determine the fate of a business.

Business accounting is the systematic recording, analysing, interpreting and presenting of financial information. Accounting may be done by one person in a small business, or by different teams in large organisations.

Accounting is the way a business keeps track of its operations. Accountants analyse the business finances so the owner can make better decisions. This information is organized into reports that show the financial health of a business.

Accounting helps business owners meet their compliance obligations. It also helps them make smart decisions with their money.

Financial reporting aims to track, analyse and report your business income. This helps you and any investors make informed decisions about how to manage the business.

These reports examine resource usage and cash flow to assess the financial health of the business.

Three main goals of financial reporting
1. Provide information to investors

Investors want to know how cash is being reinvested in the business, and how efficiently capital is being used. Financial reporting helps investors decide whether your business is a good place for their cash.

2. Track cash flow

Where is your business's money coming from and where is it going? Is the business making a profit or a loss? The answers to these show how well your business is performing, and whether it can cover its debts and continue to grow.

3. Analyse assets, liabilities and owner's equity

By monitoring these, and any changes to them, you can work out what to expect in the future, and the growth potential for the business.

Financial reports adhere to a group of taxation, accounting and legal requirements, called the International Financial Reporting Standards (IFRS). This is so a business's finances can be understood all over the world – a necessity with the increase of global companies and international shareholders. The US is currently an exception to this as companies there are required to use the Generally Accepted Accounting Principles (GAAP).

Accounting books are not just about recording the income and expenses of a business, nor does it just conclude from expenses greater than income and vice versa. These books must be recorded using an existing structure, starting with general journals, special journals, general ledger posts, preparation of trial balances, adjusting journals, trial balance after adjustments, financial reports, closing journals, and trial balance after closing. With these eight steps, the basic steps in making financial statements are correct.

In a business, there is financial control of a company where they will control the company's income and expenditure. Two types of financial control can be used, the first function is as financial reporting so that financial accounting is compiled. The second function is financial planning, where the planning can lead the company to experience profits. This control is very important because it can affect the running of a business.

Accounting can be used as a communication tool in business to convey information related to company finances to those in need. The clearer the information conveyed, the more informed decisions will be made for the business being run. This will also help accountants to determine whether the business that is being run is experiencing a loss or profit. Accounting can also be said to be a financial controller because accounting regulates company finances to run smoothly.