General Business and Finance Blog

IRIS is a fantastic piece of software that is suitable for all small firms of accountancy practices. IRIS contains many different modules that are all fully integrated and linked together resulting in less work with no duplication. When an accountancy practice uses IRIS software it comes with a complete after sales and support package, although it is such a user friendly program it is seldom needed (once the users are familiar with the program that is). In addition there are regular updates to iron out any issues that arise.

So what exactly can IRIS do? Why is IRIS such a good piece of software that makes it ideal for the small accountancy practice? The features of IRIS are as follows:

i) The ability to prepare financial statements

One of the fundamental and ‘bread and butter’ services provided by an accountant is that of  preparing the financial statements containing all the relevant disclosures required under UK GAAP, Company Law and applicable standards for clients, and this is easily done using IRIS.

By extracting the trial balance from the client, or preparing the trial balance form the basic accounting records the financial statements are prepared by posting the balances to the relevant IRIS nominal codes, and making all the relevant journal adjustments. Once the figures have been entered on to IRIS the financial statements are prepared by simply pressing a button.

Whilst the main frame work of the financial statements is already there, the disclosure notes will have to be input manually however this is simply done through the data screens, which is easy to learn and pick up.

ii) The ability to prepare corporation tax computations and CT600 returns

Corporation tax is another bread and butter service that small firms of accountants provide, and it is something that is easily done on IRIS since it links in with the accounts. Once the accounts are prepared IRIS automatically posts some of the figures, such as the profit or loss before tax, depreciation and specific disallowable expenses to the corporation tax module. This is a fantastic feature as if there are any adjustments to the tax sensitive accounts in the accounts module the corporation tax module is automatically updated, hence there is no duplication of work.

Like all the modules on IRIS, the corporation tax module is intuitive, logical and has a user friendly interface so it is easy to learn. If there are any problems clicking on the help button will help solve the issue quickly and with little fuss.

Once all the figures have been input in to IRIS the software allows the user to print off a corporation tax computation, a corporation tax return and schedules of data (which is a supporting calculation). These schedules are printed off and sent to the client for approval. Once the corporation tax return form CT600 has been approved by the client it is possible to file the tax return with HM Revenue & Customs online through the XBRL system. Online filing is a quick, efficient and cost effective way of filing tax returns and it is something that HM Revenue & Customs are actively pushing and in the future there is the likelihood that paper returns will fizzle out.

iii) The ability to prepare sole trade and partnership accounts

Whilst there are no statutory requirements with regards to sole trade and partnership accounts,  it is nice to have an organised, neat and easy to read set of accounts for the tax man, and IRIS does this.

The process is more or less the same as when preparing financial statements, in that the trial balance is posted to the IRIS nominal codes, however the narrative notes and disclosures are not needed. In addition, presenting a neat and well presented trading and profit and loss account and balance sheet to the client looks professional and gives the sole trader or partners something tangible, i.e. a physical set of trading accounts, at the end of the exercise.

iv) The ability to prepare personal tax computations and returns

Personal tax computations and returns are the individual’s equivalent of the corporation tax return and computation. Furthermore, it is another bread and butter service provided by nearly all small firms of accountants therefore IRIS also contains a personal tax module.

The personal tax module is linked to IRIS sole trader and partnership accounts therefore any changes to the accounts results in an automatic update in personal tax for the proprietor or partners.

v) The ability to prepare trust tax computations and returns

IRIS contains a trust tax module that allows the accountant to prepare a trust tax computation quickly, efficiently and with minimum fuss.

vi) The ability to maintain statutory registers

IRIS also has a company secretarial module which allows the accountant to perform all tasks of a company secretary, including maintaining the company registers, preparing the Annual Return, preparing minutes of meetings and preparing dividend vouchers amongst many other things.

Overall, IRIS does everything a small accountant would need and it does it very well. There are many advantages using IRIS with the fact it is fully integrated and linked being the main one. In addition, all of the IRIS modules are logical, easy to learn and have a user friendly interface however if there are any problems there is a fantastic help and tutorial module that is likely to solve issues very quickly. However, any user still struggling with any part of IRIS after searching through the ‘help’ tab can contact IRIS direct and they are very helpful.

I hope this article will help provide a better understand of the complexity of the situation and express an enhanced perceptive of the policies regarding Cash & accrual accounting, Cash Basis & Accrual basis – the two main methods of recording accounting dealings are cash basis accounting and accrual basis accounting. Each method has both advantages and disadvantages. But, only one method is approved by generally accepted accounting principles (GAAP)

Review of Cash & accrual basis accounting:

My article discussed briefly cash and accrual. Of accounting method, the system should help with decision making in a risky environment and calculate taxable income. The majority producers keep their records with the cash receipts and disbursements method or with an accrual method.

The reality of small business is that many companies keep their books on the cash basis because it’s simpler to understand sort of like running the business out of your checkbook and as it often coincides with the method they file their tax returns. On the other side, far more small businesses (and all large ones) maintain their books on the accrual basis, frequently for one or more of three reasons:

• They’re troubled about gross margin on products they sell.

• They want to actually know when they’re building money and when they’re not.

• They’re necessaries by lenders, investors, or government authorities to report their tricks that way.

Clarity of Cash basis accounting:  -a method of accounting in which financial transactions are recorded only when cash is involved. Similar to keeping a checkbook, a sale is recorded only when the cash is received, and an expense is recorded only when a check is written to pay for it. In the above example of income, the actual sale would not be realized until the cash from the credit card transaction is received. With the expense example using the cash method, the expense is not actually realized until the offices supplies are actually paid.

Clarity of Accrual basis accounting – the more common method of accounting in which financial transactions are recorded when they actually happen, even if the payment is made later. Accrual basically means to gather or to increase. With the accrual basis of accounting, expense and income are realized when they actually occur.

I. Income example:  while a business sells a product and the customer pays with a credit card, the income from the sale is essentially realized at the time the sale is prepared.

II. Expense example: If the company buys office supply and is given 30 days to pay, the expense is essentially posted (accrued) at the time the supplies are recived

Cash Basis Accounting versus Accrual Basis Accounting

01. Cash basis accounting: The main difference between accrual basis and cash basis accounting is the time at which income and expenses are recognized and recorded. The cash basis method generally recognizes income when cash is received and expenses when cash is paid.

Accrual basis accounting: the accrual method recognizes income when it is earned (the creation of assets such as accounts receivable) and expenses when they are incurred (the creation of liabilities such as accounts payable).

02. Cash basis accounting: Cash basis accounting is the method in which cash proceeds and cash payments are recorded through the period in which they occur under the cash basis accounting method, the revenue is recognized when the cash is received and the expense is recognized when the cash is disbursed. “Cash-basis accounting does not recognize promises to pay or opportunity to receive money or service in the future, such as payables, receivables, and prepaid expenses”

Accrual basis accounting: When revenue is recognized before cash is received, it is recorded in an accrued revenue account, such as accounts receivable. When revenue is recognized after cash has been received, it is recorded in a deferred revenue account, such as unearned revenue. When an expense is recognized before cash is paid, it is recorded in an accrued expense account, such as accounts payable

03. Cash basis accounting: there is no inventory account under the cash basis method. Goods and materials purchased for sale are recorded as direct costs in the period that payment is made for those goods and materials.

Accrual basis accounting: the inventory account is used under the accrual basis method. Goods and materials purchased for sale are recorded as current assets, and cost of goods sold are recorded in the period that the goods are actually sold

Apply by generally accepted accounting principles (GAAP)

There are two ways companies can keep their accounting books – Accrual and Cash-Basis. The accrual basis is used by most companies; only very small businesses use cash-basis.

Under the accrual method, expenses and revenue are recognized in the period they occur regardless of whether a cash transaction has occurred.  For example, if a sale is made in January but payment is not expected until February, the revenue from the sale would be recognized in January (when it was earned) and the amount due to the company is recorded (accrued) in accounts receivable.  Below are the Journal entries for the “sale on account” and the “payment on account”.

2010.Nov.05 : Accounts Receivable= 5000

Sales Revenue= 5000

(Sale on Account)

2010.Dec.05: Cash=5000

Accounts Receivable=5000

(Payment on Account)

2010.Dec.05 Cash=5000

Sales Revenue-500

(Received Cash from Sale)

Notice that the first entry above recognizes the sale in January, when it actually occurred. This method matches the revenue from the sale to the expenses incurred during the same period. On the other hand, under the cash-basis method, the revenue would not be recorded until February when the cash is actually received, as in the example journal entry below.

While this method is easier and requires fewer journal entries, the sale revenue would not be matched-up to the expenses the company incurred to make the sale possible.  For example, consider the salesperson’s salary that made the sale. Assume payroll expense is recorded in January. Since the revenue is not recognized until the next period (month), the accounting records do not portray a true picture of what actually occurred.

Under the cash-basis method, this mismatching of expenses and revenues would also occur if payment was received right away (in January), but the salesperson’s salaries where not paid until February.

Conclusion: All publicly traded companies publish their financial statements using accrual-basis method the accrual basis is also “required for all businesses that handle inventory” If the accrual basis method is used, it must be used for all financial reporting purposes. However, those that operate multiple businesses may use different accounting methods for each business.

My aim is not to tell which accounting method is best for you although like most professionals I prefer accrual accounting because it gives most business owners so much more helpful information. Rather, I want to help you understand the differences between accounting methods so you can make the better choice. But regardless of which method you use, you’ll keep in mind the importance of looking at the other method in some fashion, so you can get the benefit of the management

Author comments: I have expressed about an ‘Accrual basis accounting and cash basis accounting’ method and the difference between these methods through a short, essay & plain approach in one of my articles “Wahid’s guess” I believe the learners would have understand about both of accounting method,

Now, in this article I have presented that which accounting method is better for an organization accounting structure, Again I have explained the meaning of two methods and others important elements for comprehend an students and readers so as to  below

Introduction: In cooperation Accrual and Cash are methods are approved by generally accepted accounting principles (GAAP) for small business. Only the Accrual method is acceptable for large businesses. For the reason that of Social Security Administration’s (SSA) dealing of income from self-employment, one method may be beneficial over the other, during this article I have mentioned which accounting method is better for an organization accounting structure

Meaning Accrual basis Accounting:

It is a method of accounting in which transaction are entered in the books of accounts, In accrual basis accounting, income is reported in the financial period it is earned, anyway when it is received, and expenses are deducted in the financial period they are incurred, In the Accrual method of accounting transactions are recorded when they happen rather than when the money is received or paid. This makes the accounting slightly more difficult because business  are dealing with goods that have been purchased but not paid for and sales that have been made but the cash has not been collected. Business record both revenues and expenses when they occur. For that reason, the focus is on the recording of flow of resources like labour, goods, services and capital. The related cash flow may take place after some time or it may or may not take place in the same accounting period.

Meaning Cash basis Accounting:

In the Cash method of accounting the business is run like a checkbook. When goods and services are purchased and paid for, they are recorded. When products are sold and the cash collected No consideration is given to the “due” fact of the transaction. This system of accounting is simple to understand and as such needs less skill on the part of the accountant. Its whole focus is on cash management. The recognition trigger is simply the flow of cash. Budgetary and legislative compliance is easier under this system. An example of the cash basis would be a sale of goods in January, but the money is not received from the customer until February. Under the Cash Basis of accounting, this would be considered income in February. If attendance at a trade show was planned for May but had to be paid for in March, in a cash basis accounting it would be expensed when it was paid for in March. This method of accounting.

Recompense or Advantages of the Accrual method Accounting

The method of Accrual Accounting as retaining the advantages of the Cash Accounting System overcomes its limitations or restrictions by addition of Cash Flow Statement in the Financial Statement of the entity. The major rewards are as below

I. As the accrual method shows the recede and flow of business income and debts more exactly, it may depart you in the gloomy as to what cash funds are obtainable,

II. Accrual accounting helps in the measurement of financial presentation by properly reflecting surplus/deficit as all expenses whether paid or not and all incomes whether received or not are duly accounted for.

III. Accrual accounting afford comprehensive information on expenses which helps in knowing the cost consequences of policies and enables comparison with different policies. Also, information about calculation of financial assistance can be extracted from the accounts, which helps in its validation. This ensures the adoption of best policy, which in turn assures best use of sparse resources. It also helps in determining the future sustainability of programmes

IV. Accrual method provides disclosures on account of dependent assets and dependent liabilities so that risk connected with the guarantees issued and letters of console given can be better assessed by the user of the financial statements

V. Accrual method discloses the Accounting Policies used in the groundwork of Financial Statements for better accepting and approval of the Financial Statements.

Restrictions Limitations of Accrual method accounting: this could result in serious cash flow problem. For case in point, your income ledger may show thousands of dollars in sales, although in reality your bank account is empty for the reason that your customers haven’t paid you yet.

The Restrictions or limitations of cash method accounting:

The method of cash accounting gives a wrong picture of income received, as advance tax receipts are recognized as income the major Restrictions or limitations are as below

I. It does not provide the complete picture of the financial position i.e. information on assets and liabilities are not available for fixed assets (land, building, machineries, heritage assets etc.)

II. It does not give the full information on current assets e.g. accrued income like outstanding royalty, fees, service charges, tax arrears etc. other than No information about capital work-in-progress like dams, power plants, roads and bridges etc. is available

III. It ignores certain transactions by not recording expenditure already incurred but payment not made e.g. supplies made, salary, telephone charges, overdue interest etc. and also revenue earned but cash not received e.g. license fees, services delivered (electricity, water etc.)

IV. It gives a wrong picture of income received, as advance tax receipts are recognized as income.

V. It provides room for fiscal opportunism e.g. tax revenues can be collected in excess during a particular period followed by high incidence of refunds together with interest, payments can be easily deferred and passed on to the next financial year, revenue due in the future could be compromised by providing for one time payments.

Due to the above disadvantages, it is not potential to get the real picture of the management financial performance and position.

Recompense or Advantages of the cash method accounting: the cash method provides a more exact picture of how much actual cash your business has; it may offer a confusing picture of longer-term profitability. Under the cash method, for case, firm books may show one month to be hugely profitable, when really sales have been slow and, by coincidence, a lot of credit customers paid their bills in that month. To have a firm and true thoughtful of business’s finances,

Mode of choosing an Accounting Method: When, how, & why we can choose whichever accounting method from both. (Accrual & cash method accounting) Most small businesses (with sales of less than million per year) are free to accept either accounting method. When we must use the accrual accounting method. We must use the accrual method if: our business has sales of more than million per year, or our business stocks an inventory of items that we will sell to the public and our  gross receipts are over million per year. Inventory includes any commodities our sell, as well as supplies that will physically become part of an item intended for sale. Either method we use, it’s important to realize that either one gives we only a partial picture of the financial status of our business

Techniques to choose which accounting method is better for organizations accounting structure

The cash method and the accrual method (sometimes called cash basis and accrual basis) are the two principal methods of keeping track of a business’s income and expenses. In most cases, we can choose which method to use. In this article I have explain. How they work and the advantages and disadvantages of each. so we can choose the better one from both accounting method for our business.

These methods are different only in the timing of when communication, including sales and purchases, are credited or debited to your accounts. Here’s how each works: the cash method. The cash method is the more normally used method of accounting in small business. Under the cash method, income is not counted until cash (or a check) is actually received, and expenses are not counted until they are actually paid.

Case in point: One of the businesses finishes a job in November, and doesn’t get paid until three months later in January. Beneath the cash method, we would record the payment in January. Beneath the accrual method, we would record the income in our November books.

The accrual method transactions are counted when the order is made, the item is delivered, or the services occur, regardless of when the money for them (receivables) is actually received or paid. In additional income is counted when the sale occurs, and expenses are counted when we receive the goods or services. We don’t have to wait until you see the money, or actually pay money out of our checking account, to record a transaction.

Another case in point: We purchase a new computer on credit in October and pay ,000 for it in December, two months later. Using the cash method, we would record a ,000 payment for the month of December, the month when the money is actually paid. Under the accrual method, we would record the ,000 payment in October, when we take the computer and become obligated to pay for it.

Why Accrual Accounting vital?

The extent of economic events that occur over a period of time has become more and more complex in the 21st century. There is now a common shove near accrual accounting as a technique of growing the international comparability of national economic accounting standards.

For this reasons of equally government and corporate decision-making strategy as well as fundamental analysis, it is important to calculate economic trial in the time period when they essentially occur as opposed to the period when monetary dealings are made. In some cases, payments under government social programs, such as Medicaid grants, are dependent on formulas attached to personal income; inaccurate revenue inference may lead to beneath- or overpayment of curriculum settlement. Further commonly, accrual dimension of economic series is significant for the accurate estimate of economic trends over time.

Conclusion: The best represents the authentic condition (in other words the “true and fair” view) should be used. If proceeds from tax is not calculable and is vague or complicated to understand, then the accurate standard would be to identify such income on cash basis. The accrual-based system that basically follows the ethics of conservatism and measurability requires that we “expected no gains, but afford for losses”. In the background of government accounting, recognizing expenditure on accrual basis meets the criteria of conservatism, measurability and achievability

The Forensic Accounting Masters Degree provides one of the fastest tickets to career success. Forensic Accounting was recently listed by Yahoo as one of the highest-paid professions, and numerous publications have listed Forenic Acounting as a hot carrer opportunity. It’s surely the hottest area in Accounting.

One great thing about Forensic Accounting is that it involves exciting work. It’s not the old-school boring accounting that focuses on debit and credits, but rather it involves exciting areas such as fraud investigation, litigation support, business and divorce valuations, dispute resolution, and expert testimony.

The great secret about Forensic Accounting is that it as a relatively easy field to get into. All it takes to start is a bachelor’s degree from a regionally-accredited university. With such a degree, students can enter into an online forensic accounting masters program that offers a concentration in Forensic Accounting. Such a program can be completed within a mere two years. In all cases, it’s best to take such a degree program in a business school that is accredited by the AACSB, the the organization most widely known for business school accreditation. See, for example the Masters of Accounting Degree: Online Forensic Accounting Program at Florida Atlantic University. The usual degree title for such a graduate degree program may be something similar to Masters of Accounting, or Masters in Accounting, with a major in forensic accounting. Even though the program might be offered online, the title of the degree generally won’t include the word “online.” therefore, you won’t find any degrees with a title that says Online Masters of Accounting or Online Masters in Accounting. However, you will find degree titles that don’t include the “s” in Masters. For example, Master of Accounting and Master in Accounting are titles typically used in practice.

Forensic accounting involves the application of investigative techniques help resolve financial issues in a manner that meets standards applicable to courts of law. Forensic Accounting is not limited to the use of financial investigations that result in criminal and civi prosecution; the investigation and its results must always, however, satisfy the requirements of the civil or criminal court that has jurisdiction.

Fraud investigations are an important part of the routine work for many forensic accountatnts. Fraud is the consequence of misleading, intentional actions or inaction (including misleading statements and the omission of relevant information) to gain an over an individual, group of individuals, or an entity. Forensic Accounting is much broader than fraud investigation; it also includes services related to business acquisitions, dispute resolution, asset and liability valuation, and the determination of lost profits.

Defining the words forensic and accounting can facilitate a deeper understanding of forensic accounting. The word forensic suggests applicability to courts of law. The word Accounting suggests the recording, classifying, and summarizing of economic events in a logical manner for the purpose of providing financial information for decision making. But when these two words are combined, a strong unified concept emerges – the use of both accounting and non-accounting information to to support arguments made in court.

How does forensic accounting differ from traditional accounting? Traditional accounting involves acquiring and organizing financial data for decision makers. Accounting involves at least seven areas, including financial accounting, management accounting, information systems and technology, taxation, consulting, internal and external auditing, and forensic accounting. Each has its own distinct purpose. For example, financial accounting provides information to external users, such as investors, creditors, and government regulators about the status of a company and the results of its operations. {One the other hand|In a different vein, the purpose of managerial accounting is to provide relevant information to users inside the company so that the profitability of operations can be monitored and enhanced.

Of all the areas of accounting mentioned above, perhaps auditing most closely resembles forensic accounting, particularly in the area of fraud examination. Auditing can be further divided into two categories: internal and external. Internal auditing is the process by which a company’s operations are verified by employees of the company known as internal auditors. Conversely, external auditors are not employees of the company; rather they are independent Certified Public Accountants, and their principal task is to certifiy that the financial statements of the company fairly present, in all material respects, financial position, results of operations, and cash flows in accordance with generally accepted accounting principles.

The leading organization of Certified Public Accountants (CPAs) – the American Institute of Certified Public Accountants (AICPA) – classifies Forensic Accounting into two categories:

1. Investigative services that may or may not lead to courtroom testimony, and 2. Litigation services that recognize the role of the accountant as an expert, consultant, or other role.

The first of these services encompasses those of the fraud examiner. Fraud examination involves the detection, prevention, and control of fraud, defalcation, and misrepresentation. The second of these services encompases testimony of a fraud examiner as well as forensic accounting services offered to resolve valuation issues, such as those experienced in divorce cases.

Introduction: Financial accounting and managerial accounting are two different regulations with different objectives. Although some concepts overlap, what is important are the differences. Financial accounting is about making a fair and accurate representation of what happened

With the stipulation that the past is not always a opening, it does provide substantial clues to business performance. Managerial accounting is primarily concerned with helping management make the best possible decisions about the future allocation of resources. It is informed by historical, financial reporting data, but is not unnatural by it.

Short approach about the both accounting:

Financial Accounting: Financial accounting unavailable the homework of a business’s financial statements, mostly for consumers outside the business. These reports are used by owners, probable owners of a business, and by people who have mortgaged company money. Some government agencies that legalize business and the stock market demand companies to submit financial statements to them. As well, stockholders, suppliers, and banks also benefit from the financial reports that are produced.

Managerial Accounting: Managerial accounting helps managers plan and control a company’s operations. Accountants practice budgets to convey management’s objectives in financial terms by identifying, measuring, accumulating, analyzing, interpreting, and communicating information. After a budget has been espoused, presentation reports contrast actual results with the budget. Cost accountants help management keep track of how much it costs a company to create the artifact, or afford the service,

Deference: This dissimilarity in basic point of reference results in a number of main differences between financial and managerial accounting, although both financial and managerial accounting repeatedly rely on the same fundamental financial data.

In addition to the to the differences in who the reports are prepared for, financial and managerial accounting as well vary in their importance between the past and the future, in the type of data afforded to users, and in numerous other ways. These differences are argued in the follow.

01. Financial accounting: Financial accounting data are predictable to be purpose and demonstrable. Though, for internal use the manager requirements in sequence that is related even if it is not entirely objective or demonstrable. By pertinent, we represent apposite for the problem at hand. For example, it is difficult to verify expected sales quantity for a projected new store at good atmosphere, but this is unerringly the type of information that is most useful to managers in their decision making.

01. Managerial accounting: The managerial accounting information coordination should be supplying sufficient to afford whatever data are applicable for a exacting conclusion.

02. Financial accounting: Financial accounting is mainly worried with coverage for the company as a complete. By dissimilarity, managerial accounting services much more on the parts, or section, of a company. These segments may be product lines, sales provinces divisions, departments, or any other classifications of the company’s behaviors that management locates useful. Financial accounting does necessitate breakdowns of revenues and cost by major sections in peripheral reports, but this is secondary importance.

02. Managerial accounting: In executive accounting section coverage is the main importance.

03. Financial accounting: Financial accounting statements prepared for external users have to be prepared in agreement with generally accepted accounting principles (GAAP). External users must have some declaration that the reports have been prepared in agreement with some common set of argument rules. These widespread view rules improve comparability and help decrease scam and caricatures, but they do not unavoidably lead to the type of reports that would be most useful in interior decision making.

03. Managerial accounting: Management is allowing for moving a store to a new position and then advertising the land the store currently sits on, management would like to know the current market value of the land, a imperative portion of in sequence that is unnoticed under generally accepted accounting principles (GAAP).

04. Financial accounting: Financial accounting is obligatory; that is, it must be done. Different out side revelry such as Securities and Exchange Commission (SEC) and the tax establishment necessitate sporadic financial statements.

04. Managerial accounting: Managerial accounting, on the other hand, is not compulsory. A company is totally free to do as much or as little as it needs. No timekeeping remains or other outside society state what is to be done, for that matter?

At a glance Deference of Financial accounting & Managerial accounting

I. Financial accounting: importance is on synopsis of financial penalty of past actions.

I. Managerial accounting: importance is on verdict touching the prospect.

II. Financial accounting: Independence and verifiability of data are accentuated

II. Managerial accounting: Significance of items connecting to decision making is accentuated

III. Financial accounting: Exactitude of information is necessary.

III. Managerial accounting Appropriateness of information is necessary.

IV. Financial accounting: Have to follow Generally Accepted Accounting Principles (GAAP)

IV. Managerial accounting: Need not follow Generally Accepted Accounting Principles (GAAP).

V. Financial accounting: Compulsory for external reports.

V. Managerial accounting: Not compulsory.

Conclusion on the whole, financial and managerial accounting both are very vital facets of the business world. The majority companies have some form of each type of accounting included into their business processes. Any company will be talented to successfully keep track of their financial standing for internal as well as external purposes.

It may not be apparent to some but every business and every individual uses accounting in some form. An individual may knowingly or unknowingly use accounting when he evaluates his financial information and relays the results to others. Accounting is an indispensable tool in any business, may it be small or multi-national.

The term “accounting” covers many different types of accounting on the basis of the group or groups served. The following are the types of accounting.

1. Private or Industrial Accounting: This type of accounting refers to accounting activity that is limited only to a single firm. A private accountant provides his skills and services to a single employer and receives salary on an employer-employee basis. The term private is applied to the accountant and the accounting service he renders. The term is used when an employer-employee type of relationship exists even though the employer is some case is a public corporation.

2. Public Accounting: Public accounting refers to the accounting service offered by a public accountant to the general public. When a practitioner-client relationship exists, the accountant is referred to as a public accountant. Public accounting is considered to be more professional than private accounting. Both certified and non certified public accountants can provide public accounting services. Certified accountants can be single practitioners or by partnership ranging in size from two to hundreds of members. The scope of these accounting firms can include local, national and international clientele.

3. Governmental Accounting: Governmental accounting refers to accounting for a branch or unit of government at any level, may it be federal, state, or local. Governmental accounting is very similar to conventional accounting methods. Both the governmental and conventional accounting methods use the double-entry system of accounting and journals and ledgers. The object of government accounting units is to give service rather than make profits. Since profit motive cannot be used as a measure of efficiency in government units, other control measures must be developed. To enhance control, special funds accounting is used. Governmental units can use the services of both private and public accountant just as any business entity.

4. Fiduciary Accounting: Fiduciary accounting lies in the notion of trust. This type of accounting is done by a trustee, administrator, executor, or anyone in a position of trust. His work is to keep the records and prepares the reports. This may be authorized by or under the jurisdiction of a court of law. The fiduciary accountant should seek out and control all property subject to the estate or trust. The concept of proprietorship that is common in the usual types of accounting is non-existent or greatly modified in fiduciary accounting.

5. National Income Accounting: National income accounting uses the economic or social concept in establishing accounting rather than the usual business entity concept. The national income accounting is responsible in providing the public an estimate of the nation’s annual purchasing power. The GNP or the gross national product is a related term, which refers to the total market value of all the goods and services produced by a country within a given period of time, usually a calendar year.

Michael Russell Your Independent guide to Accounting

This article is for beginners of accounting profession who just started their long way and already struggling to understand the basics. The starting point of almost any accounting course is an explanation of the double-entry bookkeeping system which then stands as a core of any further studies. If you did not clearly understand how it works in the beginning the effect of further education will be zero.

I’ll try to illustrate the basics of accounting in the simplest possible way, avoiding in the beginning the use of such confusing terms like assets, liabilities, debits and credits, etc.

Let’s start:

Assume we have some Company X, which was established a year ago and now we are at the year-end, trying to draft accounts of Company.

All we can guess from the ‘accounting’ word itself, that it is a bunch of accounts. Great! That would be a starting point for us. Let’s put down some accounts on a paper (if you’re reading this article on your PC, it’s advised to do the below manipulations in Excel spreadsheet):

Account A

Account B

Account C

Account D

Account E

Account F

Account G

Account H

Account I

What you see above is just a list until we put some values opposite every account. The only point to bear in mind is that overall total of listed values should eventually be equal to 0:

Account A         12

Account B          9

Account C         -4

Account D         -8

Account E        -13

Account F         -5

Account G         -7

Account H          6

Account I           10

Total = 0

Coming back to accounting, each value above is called an Account balance. List itself is usually called a Trial balance. Let’s assume that these account balances were actual ones for our Company X at the year-end.

Now it’s time to understand how the double-entry system actually works. Basically the purpose of the double-entry system is to reflect transactions that Company was involved into. Not going deep into details let’s imagine that Company X made a credit sale on the first day of current year amounted to 5 dollars. The effect on our accounts will be the following:

Before                      Entry                 After

transaction                                        transaction

Account A                  12                                                     12

Account B                   9                            5                        14

Account C                  -4                                                      -4

Account D                  -8                                                       -8

Account E                 -13                                                      -1

Account F                  -5                            -5                        -10

Account G                  -7                                                       -7

Account H                   6                                                        6

Account I                   10                                                       10

Total 0 0

Above sample illustrates the main principle of accounting. So, every transaction, whatever the substance of it, simultaneously increase one account and decrease the another. In our case Account B that was increased by 5 and Account F – decreased by 5. That’s why the Total of accounts equal to 0 remains unchanged.

To make the example more practical let’s define what each account actually indicates and call these accounts respectively:

Account A Cash – The balance of this account shows how much cash our Company has in hand at the moment.

Account B Receivables – This account shows how much money our customers owe to us as at the moment.

Account C Payables – Shows the total amount that we owe to our suppliers at the moment.

Account D Borrowings – Shows how much we are due on Bank loan at the moment.

Account E Share capital – Shows how much money the Company owes to its Shareholder, i.e. money invested into business by owners.

Account F Revenue – This account shows how much Company earned from its main activity for the period of time (usually year to date).

Account G Other income – This account shows any other revenues earned out of main activities for the period of time.

Account H Operating expenses – Shows cumulatively how much Expenses Company incurred to run it’s main business for period of time.

Account I Interest expense – Shows the amount of interest paid to Bank for the period of time.

Let’s now get back to our transaction when Company sold the goods for 5 dollars on credit. It resulted in increasing of Account B and decreasing of Account F. Let’s see why. Account B showing us an amount receivable from customers and since we sold goods on credit this amount should increase from 9 to 14. On the other hand by selling goods we earned a revenue which must be reflected on Revenue account. Before the transaction Revenue balance was -5, showing us that we earned 5 dollars so far – negative sign should be ignored, as it’s used only for the purpose of getting equality. Surely by selling more at the amount of 5 dollars, we should increase our Revenue to make it 10. However because of the negative sign in place, mathematically we decrease the -5 and it becomes -10.

Let’s take another example. Company pays 3 USD rental for the office in cash. Consequently we should decrease Account A (Cash) by 5 and increase Account H (Operating expenses) by 5.

Now, when we understand how double entries work, let’s see how these accounts form financial statements which are usually the ultimate purpose of any accounting. For that purpose we’ll allocate our accounts to certain groups: Assets, Liabilities, Equity, Incomes and Expenditures. Accounts A (Cash) and B (Receivables) will form Assets of the Company. Assets are what Company actually possess(e.g. Cash) or suppose to possess (e.g. Receivables). Next group is Liabilities. That’s what Company owes to suppliers, banks, other partners. In our case Liability group will include: Accounts C (Payables) and D (Borrowings). Another group is Equity, which comprises of accounts showing how much Company owes to its shareholders. Also this group can be called share capital. All 3 above – Assets, Liabilities and Equity eventually constitute Balance Sheet of the Company. Balance sheet accounts are always showing information as of particular date. E.g. if Cash account balance equal to 3, it means that as of present moment Company has 3 USD of cash in hand.

Other groups are Incomes and Expenditures. Income or revenue accounts reflect all incoming money that Company earn from its activities. E.g. for supermarket it would be revenue from goods sold, for bank – interest income, etc. Expenditures reflect amounts expended to maintain business. Main point to remember about Income and Expenditure accounts is that they are always showing us amounts earned or expended FOR the period of time (usually year to date). E.g. if Revenue account balance equals to 500 USD as at March 31 it usually means that Company made sales totaling to 500 USD since the beginning of year up to date.

Let’s now draft financial statements out of Trial Balance we have above. They will look like this:

Balance Sheet

Assets

A Cash                                    12

B Receivables                          14

Total Assets                            26

Liabilities

C Payables                              -4

D Borrowings                            -8

Total Liabilities                      -12

Equity

E Share capital                         13

Current year’s profit                    -1

Total Equity                            -14

Total Liabilities and Equity     -26

Income Statement

F Revenue                                -10

G Other income                          -7

Total income                           -17

H Operating expenses                 6

I Interest expense                       10

Total expenses                         16

Net Profit                                  -1

Now we came to the last point – introduction of Debits and Credits. In above example we were calling accounting entries like Increase of Account B and Decrease of Account F. However to making life easier accountants use Debits and Credits to formulate accounting entries. There is following rule:

Assets and Expenses accounts increase by debit and decrease by credit. Liabilities, Equity and Income accounts increase by credit and decrease by debit.

To apply this rule, let’s formulate above entry:

Dr Receivable     5

Cr Revenue       -5

Dr.L.Lakshmi

INTRODUCTION

Accounting is the study of how businesses track their income and assets over time. Accountants engage in a wide variety of activities besides preparing financial statements and recording business transactions including computing costs and efficiency gains from new technologies, participating in strategies for mergers and acquisitions, quality management, developing and using information systems to track financial performance, tax strategy, and health care benefits management.

There’s a lot to get out of a career in accounting. Perhaps most important: You will learn how business works. The field of accounting offers stimulating and challenging work that is constantly evolving. Because accountants spend a lot of time looking under the hoods of businesses they really learn how business works. It’s no surprise that many successful players in business began their careers as accountants. It’s also no surprise that most Chief Financial Officers of large corporations have a background in accounting. An accountant is perfectly positioned to become a CFO because he or she probably has the best understanding of what drives business and profits in a company.

Audit: Work in audit involves checking accounting ledgers and financial statements within corporations and government. This work is becoming increasingly computerized and can rely on sophisticated random sampling methods. Audit is the bread and butter work of accounting. This work can involve significant travel and allows you to really understand how money is being made in the company that you are analyzing. It’s great background!

Budget Analysis: Budget analysts are responsible for developing and managing an organization’s financial plans. There are plentiful jobs in this area in government and private industry. Besides quantitative skills many budget analyst jobs require good people skills because of negotiations involved in the work

Financial:  Financial accountants prepare financial statements based on general ledgers and participate in important financial decisions involving mergers & acquisitions, benefits/ERISA planning and long-term financial projections. The work can be varied over time. One day you may be running spreadsheets. The next day you may be visiting a customer or supplier to set up a new account and discuss business. This work requires a good understanding of both accounting and finance.

Management Accounting: Management accountants work in companies and participate in decisions about capital budgeting and line of business analysis. Major functions include cost analysis, analysis of new contracts and participation in efforts to control expenses efficiently. This work often involves the analysis of the structure of organizations. Is responsibility to spend money in a company at the right level of our organization? Are goals and objectives to control costs being communicated effectively? Historically, many management accountants have been derided as “bean counters”. This mentality has undergone major change as management accountants now often work side by side with marketing and finance to develop new business. Tax

Tax accountants prepare corporate and personal income tax statements and formulate tax strategies involving issues such as financial choice, how to best treat a merger or acquisition, deferral of taxes, when to expense items and the like. This work requires a thorough understanding of economics and the tax code. Increasingly, large corporations are looking for persons with both an accounting and a legal background in tax. A person, for example, with a JD and an CPA would be especially desirable to many firms.

PLACES WHERE ACCOUNTANTS WORK

Public Accounting Firms: Public Accountants work in partnerships which provide accounting services to individuals, businesses and governments. The largest, high-profile public accounting firms are known as the Bix Six and dominate the field of accounting. This field offers advancement potential to audit manager, tax manager or partner reached by only two to three percent of new hires.

Government: Government accountants may work at the local/state level or the federal level and administer and formulate budgets, track costs and analyze programs. This work can have high impact on the public good but can also get political and is subject to bureaucratic obstruction. Government accounting offers advancement in most organizations to controller and possibly to higher administrative positions. Places which hire heavily at the federal level include the Department of Defense, the General Accounting Office and the Internal Revenue Service.

Corporations: Corporations big and small typically have an accounting group which prepares financial statements, tracks costs, handles tax issues, and works on international transactions. The work is exciting and offers tracks to audit manager, tax manager, cost accounting manager and controller on the accounting side or to manager of financial planning and analysis and Treasurer on the finance side.

Solo: A time-honored form of employment is to become a CPA and hang out your own shingle. This form of work requires you to generate your own business, but has the benefits of offering close customer contact, a high degree of independence and, depending on how good you are, high financial rewards. This work can be risky but puts you in the midst of community affairs.

ACCOUNTING: SKILLS AND TALENTS

Accounting offers superb career opportunities in many different contexts. The field is normally divided into three broad areas: auditing, financial/tax and management accounting. The skills required in these areas differ as follows:

Skill                                  Audit Accounting                     Tax & Financial      Management Accounting

People skills                            Medium                                  Medium                                    Medium

Sales skills                              Medium                                  Medium                                    Low

Communication skills          Medium                        Medium                                     High

Analytical skills                                  High                          Very High                                               High

Ability to synthesize          Medium                         Low                                                High

Creative ability                       Low                          Medium                                         Medium

Initiative                              Medium                      Medium                                        Medium

Computer skills                High                                 High                                            Very High

Work hours                     40-70/week                              40-70/week                                     40-50/week

NATURE OF ACCOUNTING

Accounting is very team-oriented: You will usually start as a junior member of a team responsible for auditing an important account or preparing financial statements. It is important then that you enjoy working as part of a team and that you learn to do so in your education.

You’ve got to Surf Waves of Innovation: The field of accounting has seen constant technological and intellectual innovation in recent decades. Firms are implementing new electronic systems for submitting and preparing financial statements. And ways of tracking costs have improved with the introduction of techniques such as activity-based costing.

Cultivate Your Network: It’s important to have a good network of business contacts in consulting as you progress. New business development becomes part of your job. As your classmates rise in their respective business areas it is important to stay in touch with them as they may become your future customers.

ACCOUNTING JOBS IN INDIA

Accounting jobs -Delhi: Search for accounting jobs with Delhi’s leading online careers network and find everything you need to manage your career development. The future is bright when you search for accounting jobs in Delhi with jobsahead.com. Jobs Ahead is a lifelong career network job seekers can use to manage their careers. The site provides access to the most progressive companies, as well as interactive personalized tools to make the process effective and convenient. Features include: My Jobs Ahead resume management, a personal job search agent, a careers network, expert advice on job-seeking and career management, message boards and free newsletters. Today’s competitive environment means you have to give yourself the best possible chance of being noticed by prospective employers.

Accounting jobs- Mumbai: By activating your confidential resume on jobsahead.com, you are ensuring maximum exposure to employers for accounting jobs across Mumbai and throughout the world, including government employment opportunities. With more than 10 million job seekers worldwide, we connect the most progressive companies with the most qualified career-minded individuals. Jobs Ahead is committed to leading the market by offering innovative technology and superior services that give job seekers and employers more efficiency and control over the recruiting process. Get expert career advice from career and industry experts and network with other Jobs Ahead Members on the Job Seeker Board. Our experts can help you identify your strengths and provide ongoing career advice designed to help you achieve your accountancy career goals.

Access the latest career resources and improve your salary negotiation skills. Learn how to succeed in an interview and find accounting jobs in India or overseas before you leave home. Subscribe to Jobs Ahead’s monthly newsletter, research prospective employers, get in-depth information about certain industries and ask industry experts your career questions. Whatever your career goals are right now, jobsahead.com can assist you in finding a great job and provide you with the advice and information you need to succeed. So give yourself the best chance to find the best accounting jobs in India and get your resume onto Jobs Ahead, where employers are searching for candidates now.

Accounting as a profession holds its roots back to the early days of human civilization. It’s one of the oldest professions that have ever existed. With the recent phenomena of globalization taking hold of the world economies, accounting jobs India has made their presence felt in the corporate sector. It has again made its way up to the top jobs category. Accounting jobs in India are among the most sought after jobs. Every small, medium and large corporate house is on the hunt for efficient accountants. If you have it in you, fat pay-packets are there for the grab.

ACCOUNTING FIELDS: If you are interested in making it big in the accounting profession, you may try various options. Colleges offer bachelors degree in commerce with specialization in accountancy or finance. A B.Com Honors degree is all what it takes for a well paid job. There would be at least one institute in every small town that provide specialized trainings and crash courses to prepare you with some practical demos for accounting job. Once you pass out with flying colors, getting a job of your liking isn’t a big deal.

A company accountant is trusted with duties like:

Setting up an accounting system

Preparing the annual audit

Filing the annual tax return of the company

Help in company secretarial work

Provide interim help with preparing accounts or book-keeping

Running the company’s payroll

Advice in corporate finance

The accounting discipline offers the following accounts jobs:

Accountant

Accounts Executive

Financial Accountant

Cost Accountant

Chartered Accountant

Accounts Manager

Taxation Manager

SCOPE

If you thought that the scopes with this profession lie only with corporate houses, you aren’t probably aware of the bigger picture. Accounting has its applications in the following sectors, which also offer number of opportunities to qualified accountants, such as Schools, Colleges, Universities, Government organizations, NGOs, Small, medium and large scale commercial units.

Financial Jobs: Financial Jobs, the source for professional careers in banking, accounting, corporate finance and investment. Browse this site for open positions accounting & financial jobs, entry level jobs in finance, corporate finance jobs, banking finance job, financial job search, financial job listing, finance manager job, finance director jobs, and real estate finance jobs.

Accounting Jobs: Accounting and financial jobs site that has openings in disciplines like Accounting & financial job USA, finance jobs in Canada, healthcare finance jobs, finance executive jobs, MBA Finance jobs, financial jobs in Dubai, auto finance jobs, finance jobs in UK etc .Accounting has always had an image problem, stuck in the public consciousness as a profession populated by math geeks who love crunching numbers but little else. While this stereotype may have been accurate at one point in history, it no longer presents an accurate picture of what the career is like. While the basic mechanics of accounting can certainly become tedious, such functions are increasingly becoming automated, with accountants focusing more on analysis, interpretation and business strategy.

In fact, accounting has been rated one of the most desirable professions available. According to the 2002 Jobs Rated Almanac, “accountant” was the fifth best job in terms of low stress, high compensation, lots of autonomy and tremendous hiring demand. Furthermore, the National Association of Colleges and Employers’ Winter 2002 Salary Survey ranked the accounting services industry first among the top five employers with job offers for graduating college students.

There are several other financial services that offer good career prospects. These include costs and works accountancy, chartered financial analysis, financial planning, investment planning, business finance, merchant banking, foreign exchange dealing and so on.

Cost and Works Accountancy: This specializes in stabilizing budgets and standards, evaluating operational efficiency and the effectiveness of production and service management, formulating the profile planning programme, guiding managerial decisions, identifying accountability for cost and profit variance, and thus rendering valuable assistance to the management. The Institute of Cost and Works Accountants of India (ICWAI), New Delhi, provides training in this area. It has several branches all over the country.

Chartered Financial Analysis: This is basically an additional qualification for financial executives. A financial analyst’s areas of expertise include corporate finance, which deals with management accounting and financial management; investment management, which includes aspects of economics, quantitative techniques, economic legislation and security evaluation; and financial services, which cover project planning, merchant banking services, portfolio management, venture capital, leasing, hire, purchase, new issue management, credit rating and other allied areas. The ICFAI is the premier institution for this programme. Some business management institutes also offer this course.

Financial Planning: Financial planning is required mainly in the financial services sectors of banking, insurance and investment advisory services. The International College of Financial Planning, New Delhi (with branches in Mumbai, Chennai, Kolkata, Bangalore and Hyderabad) provides training in certified financial planning. The Institute of Financial and Investment Planning, Mumbai offers a diploma course in financial and investment planning.

Business Finance: This is a specialization which not only includes aspects of conventional auditing and accounting but also as vast range of activities like fund raising, foreign exchange, treasury management, investment banking, money market operations and broking. The Department of Financial Studies, University of Delhi (South Campus) offers a master’s degree in finance and control essentially to commerce/economics graduates. The Indian School of Finance, New Delhi offers a master’s in business finance.

CONCLUSION

Thus accounting offers a variety of job opportunities to the students in different fields. There are many institutes offering divergent courses on accounting to update their knowledge and improve their skills.

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Hosted Call Accounting (sometimes referred to as web call accounting) is a fully managed Software as a Service (SaaS) alternative to purchasing hardware and software and expending internal resources. These services can be strictly for basic incoming and outgoing telephone call tracking from a PBX system or all encompassing of the entire communication ecosystem.  Some companies offer complete outsourcing services for remote polling, authorization code billing, charge-back, network planning, traffic analysis, carrier/service comparisons, SIP / IP PBX reporting, voice mail, call center, auto attendant, mobile tracking, internet usage and more.

Many organizations have high overhead costs, staff turnovers and little time for in-house software.   Hosted call accounting is managed by the provider; the end user accesses the services via a simple browser anywhere, anytime.  There is generally no requirement for additional software. Hosted call accounting helps organizations manage their communication facilities. Management issues include controlling abuse, increasing staff productive and equipment provisioning. This service is a suitable solution for health care, educational institutions, government agencies and general business.

Traditionally call accounting involved the printing of hundreds or thousands of pages of activity detailing or summarizing telecom facilities by division, call center or end user. Hosted call accounting gives managers the option of reviewing the same data online in concise easy to read reports and charts. You can print only the detail you really need.  No longer is there a need for one dedicated computer system to handle your call detail records.

Often when an organization changes, upgrades or replaces hardware internal call accounting software is also replaced.   Hosted call accounting can make hardware changes and migration seamless.   The central server of a seasoned web call accounting service can easily adapt to new data streams, protocols and technologies resulting in greater return on investment and long term assurance.

Hosted call accounting will reduce or eliminate the need for internal IT resources and training, provisioning of additional office space, computer resources and electricity cost.   Experts in the field of communication management take full control of  data collection, processing and real time access to reports. These specialists can generally assist you with the planning and management of the telecommunications network. 

During times of uncertainty, it is imperative for organizations to streamline their organizations cut cost and increase productivity. The free flow of communication is imperative to the lifeline of every business. The invaluable metrics collected from PBXs, IP PBX/VoIP Servers, routers and gateways can assist business in configuring and fine tuning their communication facilities. Hosted call accounting offers a powerful hands free way to improve network performance, cut misuse and abuse, improve productivity and increase your bottom line.

It would really be a hectic task for anybody, even with a business of small capitalization, to garner on the job resources for every extensible area of profession that needs to be applied over to accomplish diversified responsibilities of a business establishment.

With ever pouncing needs of compelling organizational structures and endurable substance in handling dynamic market and finance propositions it has become even tougher for businesses and individuals to keep up with the scales of maturity of books and paperwork of business affairs and other accounting transactions that are of intrinsic value to any organization.

In the professional practice, area of accounts is very vast and is directly or indirectly interconnected to various facets of any business activity. One has to deal with different factors of industrial and government norms aligned with various programs, necessities and obligations of a business setup in order to be compliant with the environment in which it is operating.

Orientations and ends of every framework are different and so are the accounting needs and it becomes all the more typical for businesses to appoint a streamlined and ever pertinent format of its books that could cater to the propelling dynamics of business environment that keeps changing.

Excelling in ones department and sharing other’s expertise in one has become the need of the present business environment and being operated wisely by many of the entrepreneurs and managers to get the best output to their resourcing needs of business.

To comply with the times and terms various processes of business and operations have been streamlined and integrated with functional departments of which accounting is marked most important and pervasive.

Financial accounting, management accounting and payrolls are the core area on which any organizational framework revolves and seeks compliance. These are predominantly the functional areas of accounting.

To bring in solutions that fulfill the requirements of all these fundamental functions in the varied segments of propositions validating services of accounting firms are of much need and thoroughly being sought by corporate houses.

Accountancy firms are the professional solution providers of the accountancy solutions and accounting services which hold expertise in payroll accounting which meticulously deal with keeping a record of wages, tax accounting and other deductions to be dealt by business.

These firms possess not only the interface of dealing with the rules and norms but also have proper infrastructure and prominent resources in form of management, chartered and tax accountants and streamlined crew of functional departments of accountancy to deal with accounting menace, unique problems and intricacies in different situations and needs of business accounting.

From recording business transactions and producing the account to calculating and establishing cost of production and preparing the management account all is served by accountancy firms in the most professional manner for varying organizational needs across the domains and applications to meet the core requisites of commerce and business.