The various economic activities that we carry out will always be related to accounting. Whether we realize it or not, there are many benefits of accounting that make it easier for us to carry out our daily activities, especially in business.
One of the benefits of accounting for society that is often encountered is when managing family finances. In addition, when starting a business.
More than that, there are many important benefits of other accounting. But before that, let’s learn what it means.
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Definition of Accounting
Accounting is a series of activities that include recording, measuring, identifying and reporting all forms of financial transactions.
The goal is to provide accurate information related to economic unity for all interested parties.
From the general understanding or definition above, some economists try to delve deeper into the meaning and benefits of accounting.
The definitions and benefits of accounting according to experts include:
1. C. West Churman
He defines accounting simply, namely as writing that has benefits in the form of experience for the writer and also consideration for decision making.
2. Suparwoto L.
Accounting is defined as a system used to measure and manage financial flows. The system then generates financial information for interested internal and external parties.
3. Riyono and Sugiri
They define accounting as an activity whose function is to provide quantitative information related to finance.
Where this information is expected to be one of the considerations before making economic decisions.
From the opinions of these experts, it can be summarized into one conclusion regarding accounting as follows:
- Accounting requires stages in its activities
- There are materials that form the basis of accounting activities
- Provide information on the results of data processing in the form of reports
- There is a decision-making stage based on information from the processed data
From the opinions of these experts, conclusions can also be drawn regarding the benefits of accounting in general or globally.
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What are the benefits? Please continue to the next discussion!
Benefits of Accounting in General
There are many benefits of accounting that we can get if we run it properly.
Especially for business actors, accounting provides important benefits related to future business development.
Not only for business, accounting also provides benefits for the smallest organization, namely the family.
For global or general benefits, it can be described as follows:
1. Neat Financial Records
As the conclusion above, that accounting has material to be processed into accounting activities.
The material referred to is none other than the entire transaction. In order for transaction activities to run smoothly and regularly, it is necessary to have a neat record of transactions or financial flows.
With these complete and neat records, it will be easier for you to manage your finances, develop your business and also develop a business strategy.
Records of financial flows are important things that must be owned to be able to plan finances and prepare financial reports.
2. Transaction Summary is Easy to Create
By carrying out accounting activities, you can more easily make a summary of all transactions.
But with a note, that previously you have recorded all transactions for one accounting period.
The transaction summary referred to in accounting is grouping transactions based on each category.
The purpose of this grouping is to make it easier to understand transaction patterns in one period.
It is important to identify categories that cause too much spending, so you can outsmart them to reduce expenses.
3. Material Analysis
The next benefit is as an analytical material. As a business actor in particular, of course the purpose of his business is not just to make a profit.
More than that, of course they hope their business can survive in the midst of business competition and can continue to grow.
To be able to achieve this goal, it is impossible without an analysis process. Accounting is done to be able to produce financial reports.
Where the report must be simple and easy to understand by anyone. From this report, an analysis can be carried out later.
Transaction grouping helps the analysis process to be easier even for several accounting periods.
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The purpose of the analysis results can also be adjusted to the needs. In addition, the analysis is also not widened and is more goal-oriented.
4. Financial Reports
Furthermore, the benefits of accounting that really help business people and even housewives are financial reports.
Detailed, accurate and neat financial reports are not only for large-scale businesses.
Even in a family, the existence of financial statements is equally important. A new family can plan finances when it has a basis, namely financial reports.
Meanwhile for business actors, accurate financial reports help measure business performance and determine the right strategy to face competition. One solution for creating accurate financial reports is to use financial reporting software .
The effectiveness of the strategy can also be identified through the short-term financial reports of a company.
If it is not effective enough, then an evaluation can be carried out immediately to improve the strategy.
Therefore, both families, small, medium to large businesses, it is important to have financial reports.
You can have it only if you carry out accounting activities exactly.
5. Reference for Decision Making
The benefits of this one accounting are the key to the success of a business or family financial plan.
From financial reports that have been analyzed to suit your needs, you will have careful consideration in making decisions.
Not just based on instinct or guesswork, but considerations derived from data. That way, the accuracy can be accounted for.
Not only as a consideration in making decisions. With accounting, it allows you to make short and long term projections for an ongoing business.
Types of Accounting
After understanding the meaning and benefits, now is the time to find out what the types are.
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That way you can choose the type of accounting that best suits your needs. The types of accounting include:
- Financial accounting, the most commonly used type because it produces overall financial statements
- Examination/audit accounting. Used for validation and verification of financial statements.
- Management accounting, focusing on business development and operational management
- The accounting system is used to create an effective and efficient financial system
- Cost accounting, its function focuses on cost analysis which aims to control the amount of expenses of a business
- Tax accounting, focusing on calculating the tax payable of a business along with its reporting efforts
- government accounting. This type of accounting is used only by government agencies
- Banking account. Type of accounting that provides benefits selectively for related parties. Benefits are given based on interpretation of bank data, recording, classification and also analysis
- Budget accounting. As with financial accounting, this type is also often used. Apart from being the basis for preparing a business budget, it is also a consideration for decisions, so that the business can develop according to plan
From the various explanations above, we can conclude that the choice of accounting type must be according to needs.
That way you can get maximum accounting benefits to be able to achieve your goals.