What Is Accounting, And What Is Its Importance To Businesses?

Accounting is the science that studies the movement of assets (assets, rights, and obligations) within organizations. Accounting departments prepare financial statements that are the basis for the routine and essential operations of formally established organizations, including: B. Fees and Taxes.
What are the benefits of accounting? 
Understand the financial metrics that matter most to your company. 
Make better decisions based on data. 
Maintain a reliable history of your business. 
Track your tax liability. 

Federal law requires businesses to complete accounting records regardless of whether they have an economic interest. Law 10.406/2002 (New Civil Code), Article 1.179: Entrepreneurs and enterprises are obliged to follow a mechanical accounting system on the basis of uniform annual accounts, according to their respective documents. Balance sheet and economic results

In addition to the accounting, it must also be signed by an accountant registered with the CRC (Regional Audit Council). However, it is clear that accounting has two departments: the administrative department and the financial department.
Management accounting vs. financial accounting

Although the main methods, calculations, and indicators are commonly used in accounting, there are other applications for accounting that should be considered.

Administrator: This is the format typically used by administrators, as it does not adhere to legal standards. Learn how to leverage and optimize accounting principles and tools to get more relevant data about your business.

Finance: This is the most traditional type of accounting. It also provides data that is interesting for management, but it is linked to government and banking standards, making it inflexible.

Main billing methods

While we don't want to oversimplify the benefits of tools in accounting, you'll often hear about the following important tools: Cash Flow: According to a cash plan, there is a relationship between a company's financial flows and outflows. there is. This is the time the money was actually deposited or withdrawn, regardless of the earlier date.

Annual income statement: Shows the company's financial flows and cash outflow ratios on a cumulative basis. This is the point where money should go in and out. It depends entirely on cash flow.

Balance Sheet: The financial position and capital structure situation for any financial period. Basically, we focus on two pillars: property (assets and rights) and liability (bonds). Many accounting measures can be generated from the balance sheet, which we will discuss later. You can consult a tax advisor in Dubai here to get the right tax and financial advice.

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