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Functions of Accounting in Supervision of Company Business

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Functions of Accounting in Supervision of Company Business

Functions of Accounting - In this world, of course, there is no company that does not need accounting in their business. With accounting, you can be more observant in determining sales per product to supervising and controlling operational budgets.

 

Not only companies need accounting but also non-profit organizations so that the government also needs accounting to manage their finances.

Over time, Indonesian accounting developed and had its own accounting standard called the Financial Accounting Standard Guidelines (PSAK) which previously also applied GAAP principles in the 1975s.

 

Now PSAK has begun to be converted by following IFRS standards or International Financial Reporting Standards that have been adopted since 2008.

 

Functions of Accounting in Company Business

1. Accounting Purposes

The purpose of this knowledge is of course to help your business, especially in terms of finance. With accounting, you can get quantitative information that is transparent and accountable.

 

Accounting is also one way to determine fairness in business problems. For example, in trading, calculating employee salaries, reporting taxation to dividends for shareholders. This means that accounting is required not only from internal parties but also from external parties.

 

2. Accounting Functions

Not only does it stop there, but accounting also has a big influence on your business. Some of the accounting functions that you need to know can be listened to below:

 

The basis for Consideration of Business Decisions

Accounting provides detailed information about your company, from transactions, inventories, assets, margins to your accounts payable liabilities. This is where you are also helped to determine how much raw material you will buy, enable you to bear debt for future company expansion, and so on.

 

1. Planning, Controlling, and Controlling Inventory

As we know that this accounting information includes information from several departments, including the inventory section. The existence of accounting can help you control inventory.

 

Not only that, but you can also plan and project the right inventory for the following month. Not only supervisors, inventory system controllers but also other business activities such as accounts receivable.

 

2. Determine the Company's Profit and Loss

Accounting is also needed to determine the company's profit or loss. Sometimes a business doesn't always run smoothly. There are fluctuations and various things that can affect your business and its operating costs. Of course, to determine the company's profit and loss, detailed and updated information is needed.

 

3. Company Financial Information

The existence of accounting will make it easier for you to get company financial reports. The company's financial statements are also required by shareholders and the government. For the government, this financial statement is the basis for determining the taxes that you must pay to the government.

 

Financial statements usually consist of statements of income, cash flow, changes in capital, balance sheets, and notes on the financial statements themselves.

 

4. Allocation of Economic Resources

Not only capable of controlling budgeting, but accounting can also allocate economic resources effectively and efficiently. The economic resources owned by the company are generally in the form of labor, equipment, vehicles, capital, and buildings.

 

To prevent waste and damage that occurs in the future, accounting is needed to make a managerial policy.

 

5. Evaluation Tool for Company Performance

Accounting can also be used to evaluate the company's performance so far. From this evaluation, you will also have the opportunity to correct deficiencies in the company's past performance. Through this evaluation, the company is also able to develop future strategies.

 

For example, in the marketing department, they are able to determine which marketing strategies are more suitable to be applied to their products so that they can increase existing sales.

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