Accounting refers to the measurement, communication and processing of monetary information in relation to economic entities such as businesses. Many accounting experts simply refer to it as business language.
Accounting practitioners are referred to as accountants and, as you can read below, it is important to ensure your accountant has the right experience and credentials.
Accounting is divided into a number of fields, some of which include:
- Financial accounting
- Management accounting
- Tax accounting and
- Auditing among others.
To start with, financial accounting deals with the financial information reporting of a company. Financial statement preparation for outside users is also done by this department. This is generally to the suppliers, regulators and investors.
Management accounting basically deals with measurement and analysis as well as information remittance to be used by the internal management. The proper keeping of the monetary data so that their summaries are showcased in reports is what is referred to as bookkeeping. In this field of study, many companies embrace the use of a double-entry system.
It is also important to recognize that accounting organizations are the ones that facilitate accounting for small businesses and expert advice for larger organizations that have their own internal accounting departments. Such organizations and their principals are generally members of professional accounting bodies. A major role of accounting firms is simply to audit the financial statements for larger companies. Auditing is done based on the general acceptable accounting principles.
Accountancy is one of the lucrative courses students should yearn for in the near future since it has a lot of value in every organization. It is the accountant who puts checks and balances in place for financial management to ensure that a business does not collapse.
With small and big businesses alike there are important considerations that should always be put in place before a home business hires the services of any accountant. Here is a glimpse of some of these factors:
This is one of the most important factors to determine before hiring the services of any accountant. A client or employer needs to hire an accountant who is fully qualified for the task and the accountant of choice should be a member of a professional organization. It is a fact in this day and age that some people can deceive by representing themselves as bookkeepers or accountants even if they don’t have a clue about accounting principles.
Experience in Accounting
This is also a major factor to bear in mind before employing any accountant. He or she should be able to demonstrate that he or she has been in the field for quite a long time and therefore demonstrates vast experience in accounting.
Find references and determine what other people have said about him or her. If you are employing someone for an in-house role, assess the referees listed in the resume.
Accounting is a very critical department of any company and particularly home business where every dollar counts. It is the discipline that knits the whole business together. It is therefore vital to engage an accountant who is both highly skilled and highly reputable and specializes in accounting for home business.