Accounting, while some may find it boring, can be said to be one of the most important functions of running a company. When accounting is performed ethically and professionally, a clear financial picture of the business is presented, which keeps investors satisfied and allows the company’s management team to ensure the business is profitable and running smoothly.
Several different disciplines fall under the heading of “accounting”. Bookkeeping is the most well known and fundamental of these. Bookkeepers keep track of all finances that a business handles, including every cent that a business collects or pays out and the company’s worth in terms of the assets it owns. Ideally, the financial state of the company would be clearly evident with just a glance at the ledgers of a competent bookkeeper. Salaries, banking statements and investment paperwork are just a few of the things a bookkeeper is responsible for.
Another accounting function is auditing. This is designed to protect the company as a whole from fraud and is usually performed by an outside agency to ensure reliable and objective results. This agency will examine the company’s ledgers and all financial records and ensure that the financial performance of the business is always accounted for and that the business is free from unorthodox practices.
Decision making in a business is impossible without good financial records, and is necessary to validate and support such decisions. The regular statements provided by accountants allow company officials to evaluate the health of the company and decide on a suitable way forward.
The size of the staff necessary to handle a company’s accounting needs is variable, depending on the size of the company. Normally, the primary members of the accounting team are registered public accountants, who must first pass a state-administered test before practising. These accountants may, in turn, oversee the practises of any number of clerks, who are not entirely certified but are trained in the trade. The head of accounting in a company is an incredibly important member in the business and must frequently meet with and deliver reports to the company head or board of trustees to deliver valuable financial information.