Role Of Accounting In Business

Accountants are responsible in analyzing and assessing the revenue, expenses, reporting financial matters and giving advice about the financial health of their employer. They help their client to know the best way to run a business by tracking and analyzing where does the money of the business go. They also give suggestions on where money could be made and advice in budgeting the money in the business.

As a financial consultant, one must be able to assist a company by evaluating drawbacks and advising solutions. Consultants deliver an analysis of current practices of a business and offer suggestions that will help a business progress to the next level. A consultant’s duty for a business usually begins with an understanding of what clients wish to improve. This includes examining financial statements, business opponents, and the company’s practices. So making recommendations on an accounting system for a new business is a consultant’s forte. In a case where a business owner knows nothing about accounting, a consultant will create a business model and formulate a plan tailored to the client’s needs.

2) The company can increase its efficiency and focus on other areas of business if it outsources a particular process.

Management accounting is about adding real value to the organization by combining accounting, finance and management with the business skills and techniques. It involves in management decision making, devising planning and performance management systems. Management accounting provides expertise in financial reporting and administer to assist management in the formulation and implementation organization's strategy.

Consequently, accountants are quite important to a business society being able to function. Even the smallest of businesses need an accountant. Their careers serve various purposes in a business from recording profits and other numbers to helping construct budget decisions that influence how well the business will run and prosper. Businesses need to price their products and consider using three elements of cost, overhead, and profit margin. An accountant can create

Accountants produce financial statements that allow business owners to make important decisions. Accountants at Kreischer Miller offer advice and support so their clients can “plan, think, and act,” before the client's competition does (“Working With Us,” 2015). Every type of business needs to have accounting in order to be successful. The ultimate draw of this career is that there is always a demand for

This Vortec case study is about the importance of accounting number and how they used in decision making and control. In this case study the Vortec manufactures a single product, a medical probe and distribute them in the market. The Vortec has two divisions, a manufacturing division which produces the probe and a marketing division which sells the probe. The reward system for both the divisions are different, for the manufacturing division the reward is based on the average unit cost of making the probes and for the marketing division the reward is based on sales revenues. Here the manufacturing division wants to decrease the average unit cost and the marketing division wants to increase the sales revenue, furthermore we need to consider the owners of the Vortec, they want maximize profit. Each of these groups have different interests and when the Vortec makes a decision, they must align all these interests.

Outsourcing is a technique for companies to reassign specific responsibilities to external entities. There are several motivations for outsourcing including organizational, improvement, cost, and revenue advantages (Ghodeswar & Vaidyanathan, 2008).

In the modern day it is important for any business to have a good knowledge of different accounting process and help to understand how the business operates. Anyone from potential investors to stakeholders could look to see how well the business is going. We all know that any kind of idea could fail if their owners doesn't very carefully manage the business accounts.

In addition, each business function has its own needs for accounting knowledge, not all of them being of the same nature but all been important to the success of the organization. Human resources need accounting skills to calculate payroll or the cost of benefits. Operations needs accounting to optimize the ordering of inventories, schedules for production, forecast manpower needs, etc. Marketing needs accounting to estimate market size, market share, profit/loss, break-even points, and calculate profitable price points based on variable and fixed costs. Finance needs accounting to calculate cost of capital, interest payments and made decisions on capital investment.

Accountants and auditors help to ensure that firms are run efficiently, public records kept accurately, and taxes paid properly and on time. Accountants analyze and communicate financial information for various entities such as companies, individual clients, and Federal, State, and local governments. The provide accurate information to clients by preparing, analyzing, and verifying financial documents, budget analysis, financial and investment planning, information technology consulting, and limited legal services. They analyze and communicate financial information for various entities such as companies, individual clients, and Federal, State, and local governments (Bureau of Labor Statistics).

Managerial accounting is an important task for an organization that is considering expansion because it focuses on providing executives, managers, and investors with the information required to approve the expansion. The fact that financial information is available whenever necessary is the biggest difference between managerial and financial accounting, which produces reports at a set interval. Accounting departments provide financial data used in performance reports that are designed specifically for an individual executive, manager, or department. The detailed performance report basically provides a comparison between budgets and actual results for a specific time period, which enables executives, managers, or departments to identify problem areas. Although financial and managerial accountants have some similarities it is important that different personnel are assigned to fulfill each role within an organization because of the glaring differences of the two positions.

Accounting is one of the most important business resources. It helps to organise, gather and manage numerical data of a business. Most businesses are interested in making a profit, therefore, it is vital for a business to control its costs by setting budgets so that this helps to ensure there is a sufficient of cash flow within the business. The role of accounting does not necessary be dealing with money, it could help and produce statistical data to assist decisions making of a business.

The bank uses the information to learn about the health of an organization. Is the organization profitable? Does the organization make enough money to repay the loan? Are bills paid on time?

    In the world of accounting, the main goal is to provide information, address issues, and give insight and solutions. These aspects are what accountants are meant to show in their reports. These reports show the people inside and outside of businesses how it is doing. Investors can know whether or not to invest in a company, and managers and owners will know how to fix certain problems. Without the specific writings, business would not be able to know their financial “health.” Owners might blindly get into to much debt. Creditors might loan to a company that cannot pay back their debt and not even know. Investors might miss out on an opportunity to invest in a good company because there was no way to show which ones are better. Accountants are the financial doctors, and the writing taking place is the businesses’ diagnosis.