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Why Accounting

When you are making money and spending money it is necessary to know how much money you make and spend.

If you don’t know what is going on you will suddenly have spent too much money.

Accounting for an individual

When you get your salary at the end of the month you probably also make your little accounting in your head.

  • You know that you have to buy food for the family, maybe pay rent for the house and pay back a loan.
  • If you have money left, you might buy a nice thing for yourself.
  • If you have more expenses during a month than the money you earn, you have a problem as you have not enough money.

Then you have to consider what to do.

  • Are you able to cut down some of your expenses or do you have to borrow some money?
  • If you borrow money how are you then going to pay back the loan?
  • Is there some way you could make more money?
These considerations you have to go through every month. It is the same for a shop, an IT company, a workshop, a graphics designer and many other businesses.

Accounting for a company

The only difference between a company and your personal accounting is the amount of money and the number of transactions involved.

With your personal accountancy you can manage to keep track of the money transactions in your head. In a company you need to put it on paper. Otherwise you will lose track of the transactions within a week.

Tools for accounting

To keep proper track of how much money is going in and out of the company you can use a computer based bookkeeping programme.

In this programme you register all the money coming in the company. And all the money going out of the company.
If you do this registering in a proper way you will always be able to monitor how the company is doing.

At the same time you follow the financial legislation of the country.

- Go to next business issue: Accountability


Read your paper backward, sentence by sentence, as a final proofreading step. This technique isolates each sentence and makes it easier to spot errors you may have overlooked in previous readings.
- Claire B. May Gordon S. May

Accountancy Step by Step
Administration Made Easy
Accountability
Accounting on a computer
Why Accounting
Computer Bookkeeping?
IT Systems
What is Accountancy?
Principles in Accounting
Understand Financial Info
Safeguarding Your Assets
Help to Take Action
Close your Business