Anyone who's worked in an office at some point or another
has had to go to accounting. They're the people who pay and send out the bills
that keep the business running. They do a lot more than that, though. Sometimes
referred to as "bean counters" they also keep their eye on profits,
costs and losses. Unless you're running your own business and acting as your
own accountant, you'd have no way of knowing just how profitable - or not -
your business is without some form of accounting.
No
matter what business you're in, even if all you do is balance a checkbook,
that's still accounting. It's part of even a kid's life. Saving an allowance,
spending it all at once - these are accounting principles.
What
are some other businesses where accounting is critical? Well, farmers need to
follow careful accounting procedures. Many of them run their farms year to year
by taking loans to plant the crops. If it's a good year, a profitable one, then
they can pay off their loan; if not, they might have to carry the loan over,
and accrue more interest charges.
Every
business and every individual needs to have some kind of accounting system in
their lives. Otherwise, the finances can get away from them; they don't know
what they've spent, or whether they can expect a profit or a loss from their
business. Staying on top of accounting, whether it's for a multi-billion dollar
business or for a personal checking account is a necessary activity on a daily
basis if you're smart. Not doing so can mean anything from a bounced check or
posting a loss to a company's shareholders. Both scenarios can be equally
devastating.
Accounting
is basically information, and this information is published periodically in
business as a profit and loss statement, or an income statement.
