Accounting is the systematic method followed in comprehensive preparation of all financial transactions in a business. Since there are agencies that oversee activities such as auditing in a business as well as the entities required to collect tax, accounting may also include activities such as making summaries of the financial transaction reports, analysing them and making reports on all these transactions. Accounting is as important as any other department that helps in the running of an organization and depends on the size of the organization where accounts can be handled by accountants and bookkeepers for the small entities and a finance department with a number of employees for large companies. Informed decision can be achieved when the financial reports provided give a true picture of how the business is performing. The roles carried out in the accounting section includes bookkeeping and tax preparation.
Financial transactions such as sales, purchases, receipts or payments that have been made to an individual or another organization that take place in a business need to be recorded by the bookkeepers at all times. There are various record books where a bookkeeper is required to record both the cash and credit transactions which includes the supplier’s ledger, daybook, customer’s ledger and the general ledger. It is through these financial records that an accountant is able to come up with reports on the financial situation of the business. The two common types of bookkeeping records include single-entry and double-entry bookkeeping system. In the single-entry bookkeeping method, only expense and income accounts can be recorded in the journal for expenses and revenue. It is important to have two entries for accounting in order to make records for the transactions and can occur in the liability, asset, expense, equity or the revenue accounts in the double-entry bookkeeping system.
Another duty in accounting is tax preparation where appropriate tax returns can be filed for the business to the responsible body every year. Other that the people involved with accounting doing the tax preparation, the business can also look for a suitable tax preparer, certified public accountants, attorneys or even enrolled agents at a fee. Calculation of the total tax amount and filing the tax are the major activities carried out during tax preparation to ensure that the business complies to the requirements set in the region it operates.
There are certain qualities that show an individual can work well in the accounting section in a business. Since financial information in a business is very important, it needs not to be exposed to unauthorized persons hence the people need to be professional and ethical. Accountants need to have a proper communication ability both in written form and verbal to ensure that they have a clear understanding of all issues in pertaining to finances in the business. They also need to have proper customer relations more so those that interact with customers every now and then in the business such as when serving them and addressing issues.