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About accounting

For accounting need to use information that is related with financial situation and transactions of a company. An accountant collects, processes and stores the information. If necessary other persons can receive the information (in legislation there are set conditions when company must give (provide) accounting data to other persons).

Main user of accounting information are government authorities. That is why many entrepreneurs believes that accounting is wasteful expenditure position. However, managers may use accounting information to control the financial position of the company (profitability, assets, debtors, liabilities).

Who must do accounting?

Any person engaged in economic activities and some other persons (for example, associations, foundations) must record transactions in books and keep accounting records. Article 2 of the Law on accounting contains such obligation.

What information company must process and record?

In general, must process information about economic transactions of your company. However, company may do certain transactions, that are not related with economic activities. Accountant also must process such information.

Company has certain property / assets (fixed assets, goods for resale, money etc.). Structure and amount (quantity) of property is changing (because of transactions, events, facts). Employees of a company and other persons uses property of a company, carries out certain activities related to the company.
An accountant need to receive all the before mentioned information, related to the company. And quality of accounting work partly depends also on how full information an accountant receives and how timely the information is provided.

What should take into account when organizing accounting?

The organization of accounting depends on the “size” of a company (number of transactions, employees, fixed assets), as well as the requirements of the management of the company..

A company with a large number of transactions usually needs an accountant - an employee who works in the company premises. Such company may use services of outsource accountant to carry out certain activities (for example, to calculate salaries).

If a company is relatively small, with small amount of transactions and a director has accounting knowledge, then director can do certain activities by himself (herself). Also in such case the company may use outsource accounting services to carry out certain activities (for example, to check accounting records, process data, prepare tax reports and declarations).

If for company managers do not need daily communication with an accountant and director decides to use services of outsource accountant, then company concludes appropriate accounting agreement with outsource accountant. In the agreement parties specify the accounting procedure, the rights, duties and responsibilities of the parties.

Accounting related information, that may be useful for entrepreneurs.

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