A calculator, miles and miles of bills and documentation, a cloud of smoke and a nervous worker who are doing a new calculation over and over. This picture is probably something most of you imagining when you hear the word accounting. Even in the age of advanced technology, this image is not far from reality. Only modern applications and programs have replaced bunches of papers.
Accounting staff has a task of keeping various types of records, making reports and explanation of business results, according to the required laws and rules of work. Also, all those activities they have to represent in a simple and understandable way to stakeholders: owners, the board of directors, banks, business partners, investors, etc.
Learn more about stakeholders and their role in management: https://www.investopedia.com/terms/s/stakeholder.asp.
As you see, the work of an accountant (or accounting sector in a company) is very extensive and involves many functions. This job is often stressful and strenuous, and very responsible, but for all that, accountants are appreciated and very well paid. Reports made by accountants serve for planning and further analysis. In a way, these represent the starting point for business growth.
Are Accounting and Bookkeeping the Same Thing?
Bookkeeping and accounting are terms that are many times identified, although these are different from the definition itself. Accountancy is an entire business function, an economic science whose just one part is bookkeeping. Detailed explanation of bookkeeper’s duties find on this page.
If we look at it within a company, it looks like this:
A bookkeeper is a person who observes financial and economic flows during the working day. The accountants do a bit more complex job as they prepare financial statements such as final balance or the profit and loss report. And for this, they need documentation from the bookkeeper.
The bookkeeper is something like a biographer of your business. They record the financial life of the company. They do that by business documentation that each sector submits to them separately. This part of accounting takes care of everything that has a value in your company from furniture, machines, vehicles, and computers to intangible assets, like software.
Other accounting services
We have already mentioned that the domain of accountant services is separated. In addition to bookkeeping, there are also:
The business and personal tax planning function has a difficult task. If it manages to save some money, this will affect the positive results of the entire company. Tax is a mandatory charge, but there are ways that it can be reduced. And more remaining funds can mean more bonuses for employees, higher investments in job improvement, etc.
Payroll services are the part of the function in charge of the “human capital,” or employees. Workers’ salaries, travel warrants, sick leave, vacations, all of which fall into the obligations of this accounting sub-function.
Financial analysis and reporting service has to examine and explain the current state in the company and business performance. If there are some irregularities, the employees responsible for this should determine the extent of deviations, how these happen and what possible consequences are.
The function in charge to control everything done so far is Auditing. It includes all documents, procedures, the current state of business, as well as the work of employees in the accounting sector.
The Importance of Accounting
Big corporations have separate accounting sector with a large number of employees. As for small companies, one of the most important associates of every business owner is his accountant. In this case, usually, one person takes up various jobs. It can be a company worker or agency dealing with the providing of these services.
Under the conditions when one person should perform all these duties, the employee is expected to cover more than just bookkeeping. He should be a consultant and a trusted person who will help the owner of the company to lead the business successfully and in legal frameworks.
In the accounting division in a company, each employee has its obligations. It is essential to cooperate with other parts of the sector so that the accounting function would be complete. For example, the bookkeeper needs to get the details from the accounting planner and then to cooperate with the statisticians who will analyze the collected results.
A well-established accounting function in the company can save a lot of money. Apart from the fact that the employees in this sector must be organized and responsible persons, they need expertise and constant improvement because of frequent changes in this business area.