Accounting and Finance are unique and link to each other. And both contribute to the start of a company until its growth since they provide us with information for the payment of tax obligations.
Both are for a company a means which does not allow knowing the financial situation and provides us with valuable and essential information for sound decision making and thus guarantee the survival and growth of a company.
The Fundamentals Of Accounting And Finance?
The fundamentals of accounting and Finance are intended to recognize, evaluate, investigate, report, etc., on the economic movements of a company.
It is a specialty that covers several departments such as administration, tax, and legal in joint help to find better alternatives and invest or access credit.
In other words, it is used to organize and inspect the financial-economic flows of the company and generate complete and accurate information.
What Are The Goals Of Accounting And Finance?
Its objectives are the work of product flows and financial flows, and this is to:
- Provide information on the economic situation to potential partners.
- Help with financial data to make good decisions for the company’s growth.
- Advise financial resources according to the needs of the company.
- Facilitate the obtaining of capital for better development of the company.
What Functions Do Accounting And Finance Have In The Company?
For the sound management of a company or business, we have two main ones:
- Take control of your assets and operations to reach a good administration.
- Report all your movements through the financial statements. This will help us know how much we reach in resources considering the other income and expenses.
Importance Of Accounting And Finance
Many large, medium or small companies do not give it the degree of importance and make wrong decisions since they do so without visualizing a financial flow in between.
For Its Importance, We Base Ourselves On Two Aspects:
It’s a financial part: it helps us reflect on the accounting flows, obtain better results and be able to determine, based on costs, the effectiveness of a company.
Its commercial aspect: analyze information which allows us to obtain profitability and better commercial projects.
What Are The Branches Of Accounting And Finance?
It is essential to know precisely and with great emphasis the branches of accounting and Finance since it is from these branches that the information for decision-making in the company is obtain. The units are as follows:
- Cost Accounting: the application of cost accounting is recommended, more so in companies that need to keep track of the products they provide. In addition to providing valuable and relevant information on the status of the merchandise in the company. As well as the profit or loss that it generates.
- Management Accounting: the application of this branch within the company’s accounting occurs in the fusion of external (professional) and internal information (company operations), thus generating that accounting is facilitated and understandable for users of the data. It is a visible factor in large companies.
What Are The Types Of Finance?
As is well know, finances help us have information on the movements at the national level of financial resources, funds, participating companies and everything relate to the money or capital of a company.
Public Finances: constituted by the finances of the public or government sector, which are essentially the balance of the country. The state is in charge of public finances and decides whether to invest in finances or expenses in public works. The collection is generate through the collection of taxes pay by citizens.
Business Finance: the application of this concept starts from the function provide. By the accounting profession and from the company’s internal data. This Finance focuses on visualizing risks, returns, costs, increased sales, decreased labor expenses, dividend payments, etc.
Personal finances: a primary factor in a person’s life is knowing how to lead a good economy. Which allows them to live calmly and without any risk. It starts when the person generates fewer expenses and increases the income resources for their finances. We can carry adequate personal Finance if we follow the following steps:
- Education implies knowing finances.
- Goals suggest having a vision of what you want to achieve.
- Budget, establish how much to spend and how much we generate income.
- Think of the expenses we make are necessary.
- Excellent credit history to be able to access some financial benefits.
- The protection is give mainly before financial scams.
- Starting a fund implies contributing to our future as early as possible.
Conclusions
Accounting and Finance facilitate companies. And also continuous improvement through the financial. Economic and equity information contain in the financial statements and the respective notes.
This process is carry out within generally accept accounting principles. And also Financial reporting standards and other standards.
Also Read: What Is The Income Statement? Income Tax Return, And more