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Keeping a track of the finances is always a significant aspect for a firm. Any minor mistakes in the accounting can lead to major problems in the working of the firm. Finance and money matters are tricky affairs and need to be handled with great caution and tact. Especially, handling a business account is even more challenging and hence requires professional accountants who can deal with the money matters in the right way.

Vital Facts :

Business accounting mainly refers to bookkeeping or maintaining accurate records of the revenues and expenditures of the business unit. This is the fundamental feature of business accounting and the core job of a business accountant. The accountant also needs to maintain a sheet that records the revenues and expenditures of the company. This sheet is known as the balance sheet of the company and an accountant needs to prepare a separate balance sheet for every financial year. There are a few commonly used terms in the process of business accounting. They are as follows:

Credit:

Credit actually refers to the amount of money that an individual takes up as a loan or which he borrows. However, in accounting terms it is also referred to the positive cash entries of the company. This means that the money or income of the business unit would be recorded under the category of credit.

Debit:

Debit refers to the payments or disbursements that the business firm has made in the particular fiscal year.

Assets:

Assets basically refer to the possessions of the business unit. This implies that the property of the company, its shares and cash and other capital equipments are all termed as the assets of the company.

Liabilities:

Liabilities are the obligations of the company and exactly the opposite of assets. If the company has a loan or any payments to be made, then they are considered as liabilities of the firm.

Equity of the Entrepreneur:

Equity refers to the difference between the assets and liabilities of the company. It is necessary that the firm maintains a positive equity.

Payroll:

Payroll is one of the most important features of business accounting. Payrolls refer to the record of the wages and salaries of the employees working in the firm. Apart from the salaries, the payroll also keeps a track of the bonuses as well as the allowances given to the employees by the company. Keeping a track of the payroll is one of the major issues of business accounting. While maintaining the payroll the accountant has to maintain a list of all the employees working in the firm. Also, the employees are categorized according to the hierarchy so as to easily calculate their salaries.

General Ledger:

The ledgers are extensively used in business accounting. In fact, these ledgers form the crux of the financial records maintenance process in a business unit. These ledgers are like the documents that record every financial detail of the country. Every financial transaction that the company has done since the inception of the company is recorded in the general ledgers. These ledgers act as guides in the process of a tax audit.

Constituents of Business Accounting:

Business accounting is an elaborate task and involves various factors. Some of the major business accounting constituents are as follows:

• The most important constituent is the section of accounts receivable and payables. This section records the exact income or revenue of the firm and the disbursements of the company. This is arguably the most important aspect of business accounting.

• Accounting of fixed assets is yet another significant constituent of business accounting. This includes the exact calculation and gauging of the basic assets that the company possesses.

• Every standard business firm has a monthly account reporting. This includes a monthly review of the financial status of the company, which is very crucial.

• The need of the hour is to have accurate accounting records in a computerized format. Today, all accounting work is done completely on the computer. In fact, all business units have adopted financial or accounting softwares and programs that help in smooth business accounting, financial organization and management.

Accounting Programs :

With the business sector becoming increasingly complex, managing the accounts of a business unit has become very difficult. Hence, to help the entrepreneurs in the task of financial management and systematic maintenance, several softwares and programs have been designed in order to help them in business accounting. The features of small business accounting programs is as follows:

1) Business entrepreneurs can use the softwares and programs for the perfect integration of business processes, proper documentation of business data and market information and most importantly calculating and updating the financial status of the company.

2) It is very important for a business entrepreneur to manage their day-to-day finances properly. The specific softwares and programs deal exactly with these matters.

3) The softwares and programs are extremely important to conduct regular financial activities. They are helpful for:

• The programs are essential for deciding upon the exact amount of quotes and invoices of the company.

• They are also essential for tracking and management of inventories.

• The greatest advantage of the business accounting programs is to calculate the companys profits and losses for every financial quarter.

• Business accounting also includes forecasting and monitoring of cash flows, which is made easier by the programs and softwares.

• Even regular chores like payment of bills and cheques are easily facilitated with the softwares and programs. The program makes payroll calculations and maintenance a very easy task.

4) Business accounting is extremely essential to track the sales figures for a specific financial quarter. There are several programs and software to help the entrepreneurs in this respect.

Now, business accounting does not only include bookkeeping task but also includes organizing a comprehensive framework of financial management and financial system in the company. It is crucial for all business firms, be it small, medium or large, to get their accounting in place. If the accounts were out of order there would be a total chaos in the company.