Accounting and Accountancy

Oftentimes when I meet someone for the second or third time, they say, “aren’t you in accounting?” While I am into accounting, which is the methodology and measuring aspect of my work, the profession as a whole is better labeled as ‘accountancy’.

Accountancy is the profession and accounting it the methods by which accountants measure, track and report on financial information so that resource allocation decisions can be made by, well, whoever the decision makers are.

For a small business owner’s personal finances, as an example, I may be measuring the finances of a few people (the family), and reporting the necessary information to the small business owner. In this situation, the decision maker is the small business owner and his decisions involve deciding how much money he has to put toward family necessities.

Generally speaking, there are two main types of accounting. There is financial accounting and there is auditing. Financial accounting typically involves processing of financial information about a business operation where information is recorded, organized, summarized, interpreted and finally communicated.

Auditing, on the other hand, is there process that an independent auditor examines accounting records and financial statements so that he or she can express a professional opinion about the financial records and answer questions about projections.

At the heart of accountancy lies the need to take stock of the day to day state of various sales and expenses. In the modern world when many contracts are partially fulfilled at varying times, bookkeeping is the only way to know where you and your business stand in the greater scheme of things.

If you operate your own small business, you may be able to do just fine with some accounting software. Take a look around for some flowchart templates. These can make monthly financial recording and reporting, dare I say it, fun. Simply enter in the various types of income and expenses, then each subsection updates the appropriate fields. Before you know it you’ve got proof that all bills have been allotted for and you’ve got your bottom line.

If you find you can manage your business finances on your own, then, by all means, stick with the system that you know works for you. If, however, you start running into complications that make it hard for you to see where discrepancies are coming from, it may be time to enlist the services of a professional accountant.

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The Role And Benefits Of Accountancy

When you hear the word accountancy, it makes you wonder what accountancy really means. Many people come to a quick conclusion that accountancy is just a word or term to go with accounting. Many people do not realize however, that accountancy is the life of any thriving business and is a necessity within any establishment. Once you understand what accountancy is, then you will realize how important of a role it plays in how we run and operate our business finances. We will go over some of the basic aspects of accountancy.

The core of accountancy is maintaining extremely accurate records of any and all aspects of a business and how it earns and spends money. You must maintain multiple types of records to account for every aspect of your business, which is why accountancy can become a very complicated process but is necessary. Different parts of these separate records are your accounts receivable and payable, your current inventory, all of your sales orders for your current tax period as well as an accurate database of your past sales records and your purchase orders. You must also maintain a accurate account of your bank statements and a backup record to cross reference all of your records to make sure they are accurate and up to date. This is only one part of accountancy.

There is another aspect of accountancy which involves knowing what to list each transaction as. Now in accountancy you need to be able to define what are your assets, knowing how to identify your liabilities, being able to show your expenses as well as you positive income. In order to do this properly, you must know how to define these different terms and what they do and do not apply to. This can make what some would view a simple task of maintaining proper records even more complicated.

These two parts of accountancy are extremely important, not only for tax purposes, but also for banking reasons as well as audits that can arise form businesses that you interact with. Accountancy also provides several benefits to businesses that use accountancy properly.

The biggest and most obvious benefit of accountancy is being able to pay your taxes accurately and on time. However, this is a small benefit compared to other vital benefits that accountancy brings. Accountancy can help you keep a accurate spending balance for your bank accounts, as well as give detailed reports of of all of your expenses and cash flow which is necessary for audits. One benefit that you can gain from accountancy, is maintaining accurate expenses and being able to reflect that in your products prices. If you do not accurately maintain records of your costs, then you could accidentally under price your products and actually lose money. Accountancy will give you a detailed projection of your costs and accurately show you your profit margin that you can compare with your labor and other expenses.

Many businesses suffer financially because they do not keep accurate records for every aspect of their business, which is why accountancy plays a very strong and important role in a business. Without accountancy, a business would suffer and eventually fail as it would have no records or projections to help it progress.

Types of Accountancy Career

Now that you’ve taken up a course in accountancy, you probably know that there are various types of careers in accountancy waiting for you after you’ve graduated. If you pass the CPA examination, you will have higher chances in securing a position as a professional accountant.

Accounting in itself is considered an art. In involves analysis and interpretation of financial data. Do you believe that individuals and businesses need accounting one way or another? Aside from business establishments, individuals also make use of accounting in their everyday life. For instance, when you compute or evaluate your expenses, income, and other financial information, that is already considered accounting. Accounting is very important and because of that, it is considered an indispensible business tool. Big and small businesses, as well as individuals, need accounting.

Accounting is of several types and therefore, when you decide to look for an accountancy career in the future, you will notice that there also several types of accountancy careers available.

To start with, you can become an industrial or private accountant. Here, accounting is limited to only one firm. If you choose this profession, you will only be serving one employer. You have to provide your best service and skills to your employer and in turn, the employer will remunerate you.

The second accountancy career that you may be able to land is serving as a public accountant. If you’re already a CPA, you can serve the general public. You will be called a public accountant once there is already the so-called practitioner-client connection or relationship. Even those accountants who are not yet certified can already practice their profession. Oftentimes, CPAs join partnerships and they have a wide scope of clientele from the local area to the national and even international clients at times.

Being a government accountant is another career. In this profession, you will be working for the government, whether local, state, or federal. The accounting methods used conventionally are also used in government accounting. You will make use of the method called double-entry systems and you will be using journals as well as ledgers. If you’re a government accountant, you will be focusing more in rendering service. Government units are not very particular with profits because they are put up to serve the public.

Fiduciary accounting is another type of accountancy careers. Here, accounting relies on trust. Executors, administrators, trustees, or any other person who is trustworthy can do fiduciary accounting. A fiduciary accountant keeps important records and he also prepares certain reports. The courts can authorize these fiduciary accountants to carry out their tasks.

The last is being a national income accountant. This type of career makes use of the social and economic concepts and not the concept of business entity. As a national income accountant, it is your task to provide a public estimate of the yearly purchasing power of a nation.

Now you know the different types of career in accountancy. To sum it all up, the five types are as follows: industrial or public accounting, public accounting, government accounting, fiduciary, and national income accounting. So, which of these five careers will you specialize in? You have to choose wisely because your future career will depend on it. While you’re still studying, you can already determine which career path to take.

Plan ahead because by doing so, you can reach all your goals in life.

The Benefits of an Accountancy Career

There is an increase in demand for knowledgeable CPAs all over the world. When you say knowledgeable, the accountant must know how to perform various duties like bookkeeping, tax preparation, company audits, and even project management. The demand for the best CPAs in different industries is due to the updated laws, business practices, and the reliance to technology.

Here’s great news to those accountancy graduates who love to work with numbers and who are willing to learn the newest accounting software – there are a lot of job opportunities out there, waiting for qualified accountants. According to statistics, the accountancy field is growing at a very fast rate. Presently, there areabout 1.2M accountants in different industries including corporations, public agencies, charitable organizations, and educational institutions; this is the best time to join the accounting field.

If you’ve earned a Master’s degree in accounting, the better because you have a higher chance of landing a job; those who have a bachelor’s degree can also take advantage of the various job opportunities online or in the local papers.

The licensing requirements for accountants vary from state to state. This is a very important consideration when choosing a degree program in accounting. Before you can take the exams to become a CPA, you will need a 150 hours course. By 2009, almost all the states in the US will follow the same requirements.

About the salary of accountants, the lowest rate is roughly $35,000 per year and that is for starters only. Once you’re hired and you’ve been with a company for many years, the salary will naturally increase. Did you know that the senior accountants can earn as much as $80,000 per year on the average? That’s a lot of money, right? Being an accountant has its benefits, especially in term of salaries.

It seems that accountancy graduates of today are given more job opportunities. You should be thankful because unemployment is prevalent in many areas. If you’re a graduate of accountancy, it means that you have better chances of finding a good paying job as compared to graduates of other courses. If you try to analyze the business situation, accountancy is essential to the success of a business organization or company. With the growing number of business worldwide, big scale or small scale, accountants are badly needed.

For those who are just going to start college, why don’t you consider an accountancy course? According to statistics, the demand for knowledgeable accountants will increase in the years to come, so why not join the force? It will only take a couple of years to graduate. Make sure that you have excellent grades so that you will have an edge when you apply for a job. It pays to study hard now because you can use the knowledge in the future. You can be one of the assets of the biggest company in the world – now who wouldn’t want that?

The benefits of an accountancy career are nothing compared to other degrees in college. Although some accountants have bad reputations, most of them are still working honestly. These accountants are contributing their knowledge and skills for the betterment of the business industry.

If you want to be part of them, go ahead; just try and apply for a career in accountancy. Who knows, tomorrow you might already have a job.