Accounting is the systematic method followed in comprehensive preparation of all financial transactions in a business. Also, it can be the process through which financial transaction records are summarized, analysed as well as made into reports to agencies that oversees activities such as auditing in a business as well as the entities required to collect tax. Each business is required to have an accounting segment which varies depending 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. Accounting ensures that the businesses are able to come up with informed decisions through the financial reports they are presented with. Bookkeeping and tax preparation are some of the roles carried out by those individuals who engage in accounting in a business.
In bookkeeping, the bookkeepers are required to record transactions that take place in the business such as sales, purchases, receipts or payments that have been made to an individual or another organization. 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. An accountant is able to come up with reports on the financial situation of the business when the bookkeeper’s record have been done properly. 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. The tax preparers, certified public accountants, attorneys or even enrolled agents can be hired by the business to carry out the tax preparation process. 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. Professionalism and ethics are important and should be followed to the letter to ensure they do not expose financial information to unauthorized persons. They should also have proper communication skills both written and verbal to ensure that they are clear and understand everything in the field. It is also important that they relate well with the customers when serving them and also addressing issues.