What is the purpose of accounting?

Accounting is part of the daily life of all businesses, and mastering it well is essential. It is not always easy to navigate between accounting, annual accounts, closing balance sheets, etc., but these notions will make your job easier once understood!

Business accounting first makes it possible to meet accounting obligations by filing annual accounts. But above all, keeping your tabs properly allows you to know the company’s financial health at any time. Its place is therefore decisive: it will enable you to analyze the performance of your activity and anticipate potential financial difficulties.

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What is Business Accounting?

Business bookkeeping can be alarming, yet it is precious for all organizations. Regardless of whether you are an independent venture, a singular business, or a miniature company, you are concerned!

We should begin with a straightforward meaning of bookkeeping: it is over every one of the strategies for giving and constantly putting away data on the organization’s monetary strength.

Accounting consists of listing:

all information relating to the company’s activity (its resources, expenses, and profits); and

all elements of the company’s assets (buildings, goodwill, financial instruments, etc.).

All the information is entered, classified, and integrated into the accounting documents. For example, the balance sheet, the income statement, and the accounting annexes are accounting documents that a company must establish each year. Conversely, accounting journals help record the day-to-day operations of a business.

How do you choose between internal and external accounting?

It is not necessarily mandatory to call on an accountant to keep your accounts. Instead, you can choose to manage your accounts yourself online using management software such as Comptastart. Learn more about using accounting software.

Keeping the accounts yourself allows you to choose your accounting method freely and directly access its strategic financial information. However, this solution may take up valuable time.

By delegating to an accountant, you can develop your company and present perfect accounts! Although the use of an accountant is often significantly more expensive, his tax and accounting advice will provide you with the expertise you may need to increase the credibility of your business.

The mission of the chartered accountant must be distinguished from that of the auditor, whose intervention is sometimes mandatory. Indeed, while the chartered accountant draws up the accounts, the auditor certifies them!

What are your accounting obligations?

All business enterprises are subject to accounting obligations. Therefore, it is necessary to keep regular accounts faithful to reality to fill them.

Two points to remember:

You must record all movements (purchases, sales in particular) of the company’s assets and keep your books for at least 10 years. The business manager must ensure that his company’s accounts are adequately controlled, regular, sincere, and exact. Be vigilant. Keeping poor performances may constitute mismanagement, and you are liable to engage your liability.

Each year, you must file your annual year-end accounts with the registry of the commercial court. This event is significant in the life of a company and constitutes an unavoidable legal obligation. So that you don’t forget any documents and don’t miss any deadline, we have compiled a checklist of the formalities for “filing of accounts.”

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How to prepare annual accounts?

Laying out its yearly records is a lawful commitment for any organization with financial exercises, regardless of whether it has briefly stopped its movement. Therefore, it is essential to hold a typical comprehensive gathering with the accomplices.The yearly records compare to three reports: the asset report, the pay explanation, and the appendix.

The monetary record presents the condition of the organization’s resources. It is split between:

Resources

Resources, which is what your organization possesses. It incorporates the organization’s decent resources (land, structures, altruism, and so forth), supplies of products and unrefined substances, client, duty, and government-managed retirement receivables and money (cash values, corporate protections, and so on).

The liabilities, in other words, are what your organization is responsible for. It comprises the organization’s value (share capital, saves, results for the monetary year, and so forth), financial obligations (bank credits and accomplices’ present records) and duty, the government-managed retirement and provider obligations.

To discover more, take motivation from our accounting report model.

The pay articulation makes it conceivable to decide if your organization’s action is excess or misfortune making. Dissimilar to the asset report and may contain exchanges connecting with a few bookkeeping years. It specifies three components:

The items, in other words, are the receipts acknowledged on account of the double-dealing of the movement. So, for example, they incorporate an organization’s turnover (deals), working sponsorships got, profits, and so on.

Costs, in other words, are essential for the smooth running of the business. They incorporate the acquisition of merchandise, rents, duties and obligations, wages and compensations, etc.

The outcome, in other words, is the benefit made by the organization. It relates to the distinction between pay and costs. This outcome is designated “balance.” It will be positive (help) or negative (misfortune).

Bookkeeping reference section

The bookkeeping reference section contains the data essential to comprehend the asset report and the pay proclamation. Specifically, it indicates the company’s guidelines and techniques. The organization’s contentions. And the clarifications on the costs to be paid and the items to be gotten.

You should endorse the yearly records. When the records have been drawn up. The forms are then disclosed. And become open to everybody. Except if you have documented an assertion of secrecy of the yearly records.

What does it change for my accounting?

As its name suggests, a company’s accounting subject to the simplified system is…simplified! If you benefit from the simplified accounting system, your social balance sheet and income statement may be less detailed, and you may use simplified valuation methods for your stocks.

On the other hand, it does not exempt the company from approving its financial statements. As with all companies, companies benefiting from the simplified regime must call the shareholders to the annual general meeting to approve the annual accounts. 

Accounting allows you to keep track of all the transactions and financial activities of your company: it is, therefore, essential for the proper management of your accounts and allows you to fulfill your legal accounting obligations. On this subject, be aware that when your company is subject to an audit, the administration may ask you to provide it with a rather particular document: the FEC (file of accounting entries).

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