What is Accounting?
Accounting is the handling and supervision of all data that allows for the financial management of a business. It is used for recording, tracking and management of the basic financial elements of a business such as accounts, current transactions, stock, cheque, bonds, invoices and bank accounts.
What does Accounting Consist of?
- Cash/Bank Account Management
- Financial Tracking of Employees
- Cheque/Bond Tracking
- Waybill and Invoice Tracking
- Customer/Supplier Current Account Tracking
Why is Accounting Important?
If a business does not have its own accounting department, this means that an independent accountant is keeping its books. However, these records are never kept daily. All documents and transactions are submitted to the accountant on a monthly basis and therefore businesses can never track their financial situation day-by-day and can’t plan ahead.
How can a Business Keep its Books?
- Using Ledgers
The most traditional method. You record all your transactions onto a ledger and when you want to look back on something, you waste time trying to find the right page. Other disadvantages are anything that might befall the ledger, including getting lost!
- Using Excel
Book keeping by recording onto Excel. When formulas and functions start to come into play, things will start getting complicated and time consuming. If you don’t take a backup of the Excel document, it’s simply a matter of time before it gets lost or something happens to your computer!
- Keeping Books Within the Company
Businesses can take care of accounting by recruiting an accountant and using desktop accounting software. But this brings on costs like the fee of the software, consulting and personnel.
- Cloud-Based Accounting Programs
With cloud-based software, you will be keeping your books online and thus have access to them anytime, anywhere. An internet connection will suffice. Because your documents will be stored on a cloud-based system, you will not have to worry about anything happening to them or inconveniences like the ones in Excel.
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