Accounting is the foundation of financial management for any company. Proper accounting setup allows not only to control the financial condition of the enterprise but also to make informed management decisions. In this article, we will consider the key points and rules that must be taken into account when organizing accounting.
Basic principles of accounting
Accounting is based on a number of principles that ensure the accuracy and reliability of financial information. Let's consider the main ones:
- The principle of double entry — each transaction is recorded in the accounts twice: as a debit in one account and a credit in another.
- The principle of continuity — accounting is conducted continuously from the moment the company is established until its liquidation.
- The accrual principle — income and expenses are recorded in accounting at the moment they occur, not when cash is actually received or paid.
- The principle of prudence — implies accounting for all possible losses and liabilities, even if their likelihood is low.
Organization of accounting
Correct accounting includes several key stages and processes:
- Selection of accounting policy
- Determining methods for accounting fixed assets, inventories, and financial instruments.
- Choosing methods of depreciation and valuation of inventory.
- Creating a working chart of accounts
- Developing a chart of accounts based on the standard chart approved by legislation.
- Adapting the chart of accounts to the specifics of the company's activities.
- Automation of accounting
- Selecting and implementing software for automating accounting processes.
- Training employees to work with the chosen accounting system.
- Document flow
- Organization of the internal and external document flow system.
- Development and approval of standardized forms of primary documents.
Control and analysis of accounting information.
Control over the accounting records and analysis of financial information are integral elements of company management:
- Internal audit. — conducting regular checks of the accuracy and completeness of accounting records.
- Financial Analysis — assessment of the company's financial condition, analysis of profit, liquidity, profitability, and other indicators.
- External audit. — engaging independent auditing firms to verify financial statements.
Tax accounting
Tax accounting is an important part of accounting that requires special attention:
- Compliance with tax legislation — timely and accurate reflection of all transactions in tax accounting.
- Preparation of tax reporting. — preparation and submission of tax returns and reports within the established deadlines.
- Tax optimization. — using legal methods to reduce the tax burden on the enterprise.
Ethical aspects of accounting.
When conducting accounting, it is important to adhere to ethical norms and standards:
- Honesty and transparency. — providing reliable and complete information about the company's financial condition.
- Confidentiality. — ensuring the protection of confidential information from unauthorized access and disclosure.
- Professional competence — continuous professional development of accountants and accounting specialists.
«Setting up accounting requires deep knowledge and attention. Proper accounting not only allows for controlling financial flows but also provides a basis for strategic planning and decision-making.»
Proper accounting setup is the key to financial stability and successful company development. Adherence to key principles, organization of accounting, control and analysis of financial information, as well as ethical business conduct are the main components of effective accounting.
Following the outlined rules and recommendations will allow your company to maintain accounting at a high level, ensuring transparency and reliability of financial data.
Success in setting up accounting and financial management of your company!
