ACCOUNTING AND FINANCE TRAINING
This training will equip you with various accounting and finance techniques . Accounting is the process of recording financial transactions of a business. Your employees will learn about the accounting process and different types of accounting. The accounting process includes summarizing, analyzing, and reporting these transactions . Your organization will report to oversight agencies, regulators, and tax collection entities. Financial statements used in accounting are a clear summary of financial transactions. They summarize a company’s operations and cash flows of an accounting period.
Types of Accounting
Accountants can record specific transactions or work with specific sets of information. For this reason, there are several broad groups that most accountants can be grouped into.
Managerial accounting uses much of the same data as financial accounting. It organizes and utilizes information in varying ways. An accountant generates monthly or quarterly reports that a business’s management team. The reports can be used to make decisions about how the business operates.
Managerial accounting encompasses many facets of accounting, including budgeting and financial analysis tools. Information that may be useful to management falls underneath this umbrella.
Financial accounting is the processes used to generate interim and annual financial statements. Results of all financial transactions that occur during an accounting period are summarized. The summaries are in the balance sheet, income statement, and cash flow statement. Financial statements of most companies are audited yearly by an external CPA firm. Audits are sometimes a legal need or can be part of a firm’s debt covenant.
Cost accounting helps businesses make decisions about costing. Cost accounting considers all of the costs related to producing a product. Analysts and business owners use this information to determine cost of a product. In cost accounting, money is cast as an economic factor in production. Money is a measure of a company’s economic performance in financial accounting.
Tax accountants often use a different set of rules to report financial position of a company. These rules are set at the federal, state, or local level based on what return is being filed. Tax accountants cut a company’s tax liability through thoughtful strategic decision-making. A tax accountant often oversees the entire tax process of a company. Tax processes entail creation of organization chart, reporting and remittance of tax liability.
The Accounting Cycle
Financial accountants operate in a cyclical environment with the same steps. Accounting cycle involves taking raw transaction information, entering it into an accounting system. It also entails running relevant and accurate financial reports. The steps of the accounting cycle are:
1. Collect transaction information such as bank statements, receipts, payment requests and uncashed checks. One can also collect credit statements or other documents that contain business transactions.
2. Prepare the financial statements to summarize all transactions for a given reporting period.
3. Post journal entries to the general ledger for the items in Step 1. You do this while reconciling to external documents whenever possible.
4. Post adjusting journal entries at the end of the period to reflect any changes to be made to the trial balance.
5. Prepare the adjusted trial balance to ensure these financial balances are correct.
Importance of accounting
Understanding your business.
The first reason why accounting is essential is to understand your own business. It is impossible to run a business without keeping track of all your expenses and revenue. As a business, you need to look at the whole picture; income and expenses are a small part of the entire picture.
It is required by law.
It is a legal rule for businesses to keep records of their accounts. Year-end accounts need submitting to either company’s house or HMRC. Documents need keeping for at least of six years.
It helps Decision Making.
Every business has to decide how they run it, how much stock to keep and if changes are required. Looking at the accounting figures will help make these decisions.
Produces the reports for year-end.
It doesn’t matter if you are a large limited company or self-employed. Year-end submissions to Companies House and HMRC are required. The least reports required are the Balance sheet and Profit and Loss.
It is required for investments, loans and sale of the business.
If you need a business loan or investment, they will look at your accounts to decide if it is a good investment. The significance of the investment will depend on how much information required. Complete due diligence may also be required. Measures business performance. There are lots of accounting ratios to help measure business performance. We have produced a list with ratio calculators.
Accounting keeps the business organized.
Without accounting procedures in place, you wouldn’t know how much money a business has. It is good practice to complete accounting on a regular basis and have up to date reports.
Accounting is necessary to collect payments.
A company may agree to extend credit to its customers. Instead of collecting cash at the time of an agreement, it may give a customer trade credit terms
Responsibilities of an Accountant
· Accountants help businesses maintain accurate and timely records of their finances.
· Accountants maintain records of a company’s daily transactions
· Accountants compile transactions into balance sheet, income statement and statement of cash flows.
· Accountants perform periodic audits or prepare ad-hoc management reports.
Skills required for accounting
· Be able to diagnose and correct subtle errors or discrepancies in a company’s accounts.
· The ability to think in a logical manner is also essential; it helps with problem-solving.
· Mathematical skills are helpful but are less important than in previous generations. This is due to the wide availability of computers and calculators.
Corporate finance includes financial activities of running a corporation. It is a department or division which oversees the financial functions of a company. The primary concern of corporate finance is the maximization of shareholder value. This is achieved through short-term and long-term financial planning and different strategies’ implementation.
Public finance deals with the study of the state’s expenditure and income. It only considers the government’s finances, fund’s collection and its allocation. The allocations are given to different sectors of economy considered as essential functions.
Public finance can be divided into three types
Public revenues entail all receipts and income irrespective of their nature and source. The government acquires public revenue during any given period. It will also include the loans raised by the government. Public revenues also include income from taxes, price, fees, penalties, fines, gifts, etc.
ii). Public Expenditure:
Public expenditure means the expenses incurred by the government. It is the expenditure for maintenance and preservation of the economy and the nation.
iii) Public Debt:
Public debt means the loans raised which is a source of public finance. Public debt carries with it repayment obligation to the individuals and the interest.
Private finance helps a company raise funds to avoid monetary problems. This method helps a company which is not listed on a securities exchange. A private financial plan can also be suitable for a nonprofit organization.