Small Business Support System

Accounting is a very important part of a business. As an entrepreneur, you either do it yourself or get someone else to do it for you. I have included this article for freelancers to have a very broad outline of the accounting profession. With this you can at least appreciate the discipline as well as its role in your business. As your business grows, the distinctions between the different types of accounting will become increasingly important.

When you are first starting, the only form of accounting you’ll ever meet would probably be record-keeping and bookkeeping. This is the part where you record the sales you’ve received and the expenses you have made using receipts, invoices, cheques and other transactions source documents.

Firstly, what is accounting?

For most people, accounting does not concern them because they think of it as a laborious activity performed by people who are ‘good with numbers’. Accounting is often confused with the narrow concepts of record-keeping and bookkeeping.

Accounting of course is much broader than that. “Accounting is the system that measures business activities, processes that information into reports and communicates these findings to decision-makers”. The accounting system produces financial statements that report on an individual’s or an organization’s business in monetary amounts.

Who Uses Accounting Information?

1. Individuals, 2. Businesses, 3. Investors and Creditors, 4. Government Agencies, 5. Taxing Authorities, 6. Non-Profit Organizations and 7. Other Users including employees, consumer groups, labour unions and the general public.

The Types of Accountants and The Specialized Services Performed By Them:

1. Private accountants – These work for single organizations. They may perform cost accounting, budgeting, information systems design, internal auditing, financial accounting and management accounting;

2. Public accountants – These serve the general public. They may perform specialized services such as auditing, tax accounting and management consulting.

For small business owners, the areas that would occupy most of your time is financial and management accounting. Financial accounting provides information to people outside the business including creditors and the government for tax purposes. Management accounting generates information for you, the person who manages the operations of the business. This will produce how much you are spending on manufacturing your products or providing your services in a way that you can see where you are lacking and where your are doing well on.

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When someone calls my office, there’s a good chance they will be put on hold. We don’t want to put anyone on hold; it’s just a necessity that arises from being busy. When people who call are put on hold, they are greeted with a short message telling them how much we regret having to make them wait, followed by the soothing sounds of Vivaldi, Wagner, Bach, Brahms, Beethoven and others.

Yes, we offer classical music on our phone system. Some people like classical, others don’t. I can appreciate anyone’s musical taste, but regardless of whether or not you like classical, the recordings are of famous symphonies performing well known compositions, they are not Muzak versions with synthesized orchestras. Why do I mention this? The other day, I called upon a company we do business with and was put on hold myself. They have some form of Muzak, which many businesses now employ. Don’t get me wrong, I am used to hearing almost everything on Muzak, from James Taylor to Classics of the 50′s and 60′s.

While on hold this time, however, I found myself humming along to none other than Mountain’s “Mississippi Queen”. At first, I though it couldn’t possibly be, but sure enough, it was. Was I that old? Was this masterpiece of raw, rootsy rock and roll so ancient that even it deserved the Musak treatment. I hung up the phone in disgust. Apparently, nothing is sacred anymore. You see, Mississippi Queen was meant to be heard in it’s original form, not condensed into a midi file and played back as though it had been originally written by the inventor of the Casio Tonebank. I had never felt so old in my life. Not only that, I was disgusted that the soundtrack to my youth had been Lawrence Welk-a-sized into fluffy, lightweight hold music. Ladies and Gentlemen, Rock and Roll has officially died.

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