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Overview_of_Accounting_and_Accountants
| Overview of Accounting and Accountants
Accounting is a very important part of a business. As a
freelancer, you either do it yourself or get someone else to do
it for you. I have included this article for freelancers to have
a very broad outline of the accounting profession. With this you
can at least appreciate the discipline as well as its role in
your business. As your business grows, the distinctions between
the different types of accounting will become increasingly
important.
When you are first starting, the only form of accounting you’ll
ever meet would probably be record-keeping and bookkeeping. This
is the part where you record the sales you’ve received and the
expenses you have made using receipts, invoices, cheques and
other transactions source documents.
Firstly, what is accounting?
For most people, accounting does not concern them because they
think of it as a laborious activity performed by people who are
‘good with numbers’. Accounting is often confused with the
narrow concepts of record-keeping and bookkeeping.
Accounting of course is much broader than that. “Accounting is
the system that measures business activities, processes that
information into reports and communicates these findings to
decision-makers” . The accounting system produces financial
statements that report on an individual’s or an organization’s
business in monetary amounts.
Who Uses Accounting Information?
1. Individuals, 2. Businesses, 3. Investors and Creditors, 4.
Government Agencies, 5. Taxing Authorities, 6. Non-Profit
Organizations and 7. Other Users including employees, consumer
groups, labour unions and the general public.
The Types of Accountants and The Specialized Services Performed
By Them:
1. Private accountants – These work for single organizations.
They may perform cost accounting, budgeting, information systems
design, internal auditing, financial accounting and management
accounting; 2. Public accountants – These serve the general
public. They may perform specialized services such as auditing,
tax accounting and management consulting.
For small business owners, the areas that would occupy most of
your time is financial and management accounting. Financial
accounting provides information to people outside the business
including creditors and the government for tax purposes.
Management accounting generates information for you, the person
who manages the operations of the business. This will produce
how much you are spending on manufacturing your products or
providing your services in a way that you can see where you are
lacking and where your are doing well on.
About the author:
Marquez Comelab is a private currency trader based in Melbourne
, Victoria . He is the founder of TheFreedomToChoose.com - an information portal about trading financial markets,
real-estate and business and OrangesAndLime.com -
producers of cards, prints & posters. Contact him at
mqz@orangesandlime.com.
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