The present age is the age of trade, business and commerce. Business is increasing day by day and becoming complex too.
An organisation can not remember its dealings for log and so it becomes necessary to keep a written record of all business transactions day by day, this lead to the development of accounting.
Accounting is the language of finance. It conveys the financial position of the firm or business to anyone who wants to know.
It helps to translate the
workings of a firm into tangible reports that can be compared. So it is essential that we know the meaning of accounting.
For management to make decisions about the future of the firm they require relevant financial information. It is the language of business that records summarizes and analyzes all transactions and events of a firm.
Functions of an Accountant:
Accountants, in the modern era, perform a variety of functions. Their jobs are no longer limited to the preparation of financial accounts. The accountant also provides their clients, the government and society in general with many other important services.
Maintaining Books of Accounts:
This is the primary function of an accountant, i.e. to perform the functions of accounting. He will maintain a systematic record of all financial transactions of a firm.
Cost Accounting:
Accountants also carry out cost accounting, i.e. examine the costing structure of a firm. They record, report, summarize and analyze cost data of
organisation.
Statutory Audit:
The laws of our country require a few organizations to be compulsorily audited by an auditor. So limited companies, cooperative societies, companies or firms that have crossed a certain turnover limit.
Financial Advice:
Accountants can provide investment advice for their clients. They are proficient at reading and analyzing financial statements and so can advise whether a company is worth investing in or not. They can also analyze the client’s needs and help them choose the insurance policies most suited to them. If a company wants to expand they will require the services of an accountant to help them with the cost analysis, project report, etc. An accountant will also help the client check the feasibility of the expansion project and its long-term prospects.
Management Accountant
Accountants provide consultancy services in their areas of expertise. So if you want to reduce your fixed costs, or require working capital management or need to reform your credit terms, etc. an
an accountant can come to your rescue.
Internal Audit:
Some organizations also opt for internal auditing, which is also done by
accountants. Internal auditors work with the management of the firm to review the accounts and the internal system of the firm at regular intervals of time.
Taxation:
An accountant is also capable of handling taxation matters for a firm or an individual. He can file tax returns on behalf of his clients. Another important role of an accountant is that of a tax consultant. He has the knowledge and the information to advise his clients on how they can save on tax. So he will advise the clients in various ways they can reduce their tax burden through smart investments and changes to their financial system etc.
Importance of Accounting:
- Facilitates to replace memory and comply with legal requirements.
- To ascertain the net results of operations and also to know the financial position.
- To take effective decisions.
- Facilitates the settlement of tax liability.
- Facilitates the raising of loans.
- It acts as legal deviance.
- It facilitates the ascertainment of the value of the business.
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–Maulin Modi
