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Accounting Affects Us All

Accounting and Book Keeping

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Accounting - to some people it's a nightmare, to others it's simplicity. One thing remains constant - we all need to do it! In every walk of life we need to account for our finances, from our personal affairs through to the larges corporations.

Accounting plays a major part in all of our lives and for the small and medium sized business owner will take a significant part of their time. Some will hire a book-keeper to keep records of daily transactions to pass on to their accountant, whilst others will undertake regular accounting tasks themselves either to the financial year end or even to filing directly with the various bodies themselves. Most businesses will utilise the services of a qualified professional accountant to finalise their accounts for submission as well as giving advice on tax matters and any savings that can be made.

The accountant can be a great asset to any company that will involve him in regular updates of activity and future plans. He has the knowledge and experience to give advice that will ensure that a good financial grip is kept on the business and to advise about major purchases and investment plans. Through his network of contacts he will be able to assist in all respects of the business finances, from advice on how to keep the daily financial records (the books) through to payroll, pensions, asset acquisitions, mortgages, etc. etc. The wise businessmen use him as an ally and his fees become less significant when compared to the benefits and savings the accountant brings to the business, others simply use his services at the end of the financial year to conclude the accounts - and they miss out on so many opportunities where his valuable support and advice could generate savings or avoid costly mistakes.


Overview of Accounting and Accountants

Accounting is a very important part of a business. As an entrepreneur, 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.

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 the author of the book: The Part-Time Currency Trader . It is a guide for men and women interested in trading currencies in the forex market. Discusses analysis, tools, indicators, trading systems, strategies, discipline and psychology. See: His other articles are also published at along with other helpful articles.

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Accountants know the tax laws inside out and are well-versed on most other aspects of business financial law. Their skill and experience can save you the cost of their fees several-fold, so don't look upon your accountant as an expense, look at him as an asset that is saving you money. He can often point out the savings you might be entitled to without even realising it, as well as the best ways to do things like drawing money out of the business without paying a high amounts of tax. 

It is best to try to find an accountant who will keep in contact with you regularly, reminding you of tax and documentation deadlines and advising you of any changes in the law. They should also be able to advise you on bookkeeping methods, payroll and suggest computer software that could be helpful for these.

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