The changing phase of accounting from early days

Here, we are going to discuss about the changes happening in the field of accounting. Let us start from the early days. Accounting is the crucial practice of our old civilization. Our ancestors started the accounting as a procedure when commercial revolution took place. Luca Pacioli is the famous Franciscan monk, wrote a mathematics book which highlights three things that are essential for accounting. They are adequate cash, an accounting system and a good bookkeeper. Technology is a strong element plays a vital role in every changes happened. It has helped many accounting firms to implement different strategies to solve the accounting requirements of their clients. 

Mathematicians invented new applications in order to make the process of accounting much easier. But the invention of computer significantly changed the practice of accounting in many ways. Before the accounting used to be solely depend on the papers. This would consume more time and very less mobility. Accessibility is restricted to one or two person in the same place. Computer technology and the invention of accounting software completely altered these restrictions. Here, we do not have to depend on papers, instead we can feed all the data on the system and we can even keep the back up into secured CDs. One or more person can have an instant access to the same data at the same time. Online accounting facility helps us to access the accounting data from any computer; here we do not have to depend on the single system. Computer has changed the orthodox picture of accounting. There are lots of options we have now days to complete the accounting tasks easily in a quick turn around time. Many accounting companies are equipped with advanced accounting software and they can help you completing all your tasks rapidly and keep chaos free records.

Accounting Glossary – A short notes

This blog helps you to understand few crucial terms used in accounts. This would help the beginners to improve their expertise in accounting. 

  • Accounting Equation 

             It is Liabilities + Capital = Assets. It is a widely known accounting equation. This has been created on the basis of a balance sheet and double entry accounting.

  • Accounting Training 

             Training to set up a financial tracking system is widely called as “Accounting Training”. The training includes monitoring the process of financial transactions and explaining the financial statement for management. The training should explain you about the general ledger and the financial statement format.

  • Accounts Payable

             Accounts Payable is the current liability. Its represents the amount payable (to be paid) by a business to a creditor for the service purchased on open account. Open account is nothing but getting the amount or service without any evidence or written notes. Accounts Payable is also called as “A/P” . 

  • Accounts Receivable

             Accounts Receivable is direct opposite to Accounts Payable. Here, the customer or employees owes money for the services purchased from the company on open account. It can be called as “A/R”. They are the amount owed by the customer from the company for the product or service purchased. 

  • Accrual Basis

             It is the practice of keeping records. Here, the income will be recorded when earned and the expenses will be recorded when spent even if we may not received the cash. 

  • Bad Debts

             They are the due amount on the open account that has been determined as uncollectible. 

  • Bank Reconciliation

             Bank Reconciliation is verifying the company’s checkbook comparing with the entries on the bank statement. It includes the verification of the depositor’s checkbook balance and the bank statement balance. 

  • Bookkeeping

             The practice of systematic recording of transaction is known as Bookkeeping. It starts with recording all the entries and ends with preparing the financial statements. Many accounting outsourcing firms are providing bookkeeping services. 

  • Liabilities

             Liabilities are the amount owes by the company to its creditors. Examples of liabilities are accounts payable, payroll taxes payable, rent payable, income tax payable. 

  • LIFO

             The abbreviation for LIFO is Last In, First Out. It’s a method of valuating the inventory. i.e., the last items entered into inventory should be considered the first item out. 

  • Solvency

             Solvency is the long term ability to meet all the financial obligations of a company. When a company failed to meet all its financial obligations, it’s become insolvent.

 Hope this would have helped you to identify the synonyms of few accounting terms. Remote accounting services are available to help you with all your accounting needs.

Accounting is a key tool for business growth

Accounting is an important area for every business. It’s not a matter of keeping cash flow statements and the expenditure books, but it should involve in thorough knowledge of profit and loss, which really matters. To analyze and understand these criteria we should have at least the basic knowledge of accounting. 500 years ago, a man Called Fra Luca Pacioli found that there are three things required for running a business. They are adequate cash, comfortable with the number side of business and creating a system to organize the financial information. Now this is called as financial accounting. Minutes of attention are required in accounting area and we cannot disagree that it’s quite vast. Considering such cases, large scale industries began to trust the financial accounting outsourcing.

Here are few tips to protect the business from loss. First of all the manager has to ensure that their company is guarded from check fraud. To achieve this, we can set up the financial limits for checks with our bank. Utilize the financial statements to understand the expenses and the incomes. To optimize the profit level, you can cut down the branches where you are spending expenditure beyond the limit and you can look for an economical way. Set up a payment control system. Monitor the purchases made above a certain amount and justify the requirement of that purchase. Also it is required to screen the collection and outstanding invoices. Clearly mention the payment terms on each invoice to avoid the mischief. On the whole, ensure there is an invariable cash flow. A systematic accounting practice would help you reducing the mistakes and missed entries. Accounting helps to achieve the business growth dramatically. Accounting outsourcing companies helps you with streamlined accounting methods cost effectively.

The New Pace of Online Accounting

This is the age of online accounting and bookkeeping. The usage of desktop dependent accounting software has been replaced by the online accounting tools and software. It’s catching up the trend progressively. Online applications provide you the opportunity to access your data wherever you got internet connection and you don’t require to depend on the single desktop. It’s so simple to operate the online accounting system. Its also reduces the troubles of buying the latest version of software every year, downloading them and installing them.

Bookkeeping is a crucial task in the field of accounting and more attention has to be given in order to sustain in the market. Hence, it’s quite time consuming. Online applications help you to complete it quickly and you can have a quick access to a particular data without any complications. It is highly valuable for the small and medium sized business companies. Online accounting got infinite benefits in terms of cost effective, efficiency and stress free accounting. Many accounting firms have been shifted their platforms to online accounting system considering all these benefits. Business can save a lot of time and money by lending the accounting tasks to accounting firm. As they are expertise in that particular field and will be able to help with all your accounting needs in a quick turn around time. It’s shrewd to outsource your tasks to accounting companies in order to save the money and time. There is no clarification required as it’s a proven strategy.