Basic Accounting Principles - What Are They

There are four basic accounting principles that, along with four basic accounting assumptions and four basic accounting constraints, make up the generally accepted accounting principles, or GAAP, in the U.S. The GAAP are the accounting rules under which businesses record and report their financial earnings and losses for the accounting period. These rules are issued by the Financial Accounting Standards Board, usually in conjunction with other government entities. Accountants are not necessarily required to follow the rules, but the rules should be followed as closely as possible as they set standards that should be met to ensure appropriate accounting activity, understandability and comparability of the accounting data for different businesses. Below is a list of the four basic accounting principles and a brief explanation of each one. Artikel Murah Berkualitas

1. The Cost Principle

Businesses are required to record and report assets based on the actual cost incurred to acquire them rather then the free-market value of the acquired assets themselves. The idea behind this principle is that this method of recording and reporting is reliable and lessens the opportunity for factors such as biased market values to interfere with the accounting. However, this method may be viewed as irrelevant as it relates to the actual value of assets.

2. The Accrual Principle

Businesses are required to record and report revenue at the time it is earned and realized by the business, not when the cash for the revenue is received by the business. This method is known as accrual basis accounting. The purpose of this principle is to actually show what work has been completed and not what is to be done in the future.

3. The Matching Principle

This principle allows for real time analysis of the expenses and revenues. Using this principle will show just how well the business has done financially and how effective it was. Somewhat like the Accrual Principle, expenses in this case can only be recorded and reported when revenue is to which such expenses are related was earned.

4. The Disclosure Principle

The accounting records of a business must be disclosed so that judgment about the financial status of a business can be easily made. However, the disclosure of accounting and financial information should not cause the business to accrue unreasonable expenses or cause erroneous opinions.

Beginner’s Guide For Buying Accounting Software: Understand Basics Of Accounting First

Having decided to go for an accounting software, what you must understand is that the best accounting software is the one that performs all the conventional accounting functions promptly and accurately. All additional features are secondary to the basic functions. Never forget, it is the “rigid rules” of “accounting” that make the software so consistent throughout. Artikel Murah Berkualitas

Since most of businesses deal in cash in some form or the other, the foremost accounting function is Cash Book maintenance, which ensures that all cash transactions are monitored for a certain period of time.

Next, comes the Bank Book, wherein all the records related to bank transactions are kept and can be easily sorted out for any specific time period.

Then, there is the Journal Book, which is what one needs to refer to for all such transactions that are neither related to cash, nor have anything to do with the bank.

Besides, there is Purchase Book and Sales Book. While the Purchase Book keeps track of all the purchases made and all such transactions that have anything to do with purchasing, Sales Book, as the name suggests, records the sales.

These books come in handy to prepare Trial Balance, which demonstrates the accounting accuracy of the involved transactions. The Trial Balance has a Debit and a Credit side. To find out if the transactions have been recorded properly or not one has to tally the sum total on Debit side with that on the Credit side. If they tally accurately, it indicates that the transactions have been accurately recorded. However, the tallying is effective only when the transactions are recorded using the double entry concept. The Double entry concept works on the principle that for every Debit, there has to be a Credit.

Now, if you are about to choose an accounting software, make sure that it performs these basic functions efficiently and accurately. Another thing that you must bear in mind is the user friendliness of the software because getting a technologically complicated software may make accounting complicated, which, surely, is not what you are getting the software for. So, settle for a software that is easy to operate and gives accurate accounting results.

Business Accounting Programs: What's the Right Choice for Your Business

There was a time when small businesses could run their operations with little to no book keeping or accounting practices. But with more and more people leaving their 9 - 5 job and opting to take their chances running their own small business either from home or an office is driving the demand for accounting programs. Countries all over the world are reporting an increase in small business and these small business help make up a countries GDP thus helping fuel their economies. The need for accounting programs for small business has never been greater as it is today, in fact most businesses can not get away with not having some sort of accounting program in place, to help run the day to day finances of their businesses.

Each business is different in regards to accounting needs. Some businesses choose to outsource most Artikel Murah Berkualitas of its accounting duties during tax season while others have accounting programs ranging from simplistic accounting programs to advanced accounting programs. Stricter government regulations over the years have made it mandatory for all businesses to properly file and abide to accounting regulations in place.. It is imperative that a businesses accounting program is up to par in doing so and can sometimes mean the success or failure of your business.

One of the more simple programs ion the market today is Microsoft Money. This program is pre-installed on most PC’s manufactured today and its simplistic interface is the main reason it is such a hit for individuals and small businesses that choose to use this accounting program. As far as small businesses are concerned Microsoft Money can might be able to meet your accounting needs but be aware that the program is geared towards personal finance. However Microsoft does offers a version that is catered to the small business called Microsoft Money Small business 2006.

There is also the accounting program Quick Books which is geared towards the small to medium sized business and is much more advanced then Microsoft money. This program is designed by a company called Intuit, that offers free support when you purchase their product which may come in handy as not all accounting programs offer the level of support you will receive from Intuit. Quick Books allows you to tailor reports and the interface to suit your companies needs and help streamline your business accounting. It will also set up all your files and prepare them for the year end tax season, this accounting program is defiantly the accounting program of choice for many small business.

With the number of accounting programs out there its not very difficult to choose the program that will best suit your accounting needs If you’re a startup operating out of your basement or you are a medium sized business with hundreds of employees worldwide there is an accounting program that will help your business comply with government regulations and accounting policies.

Call Accounting for VoIP and Analog Communication Systems

There was once a time when there were no telephones, facsimile machines, personal devices, computers or the Internet. Today most people cannot phantom such a primitive existence. Communication is the link that allows our world to function at its torrid pace. Business must continually adopt modern technology to successfully compete in a world that demands instantaneous results. The proper management of communication infrastructure is crucial in the success of any organization.

The entry points into every organizati Artikel Murah Berkualitas on usually include a combination of auto attendant, custom call routing (CCR), voice mail, interactive voice response (IVR), automated call distribution (ACD), wireless and countless other devices. Many organizations are turning to communication servers over conventional PBX systems to deploy VoIP based pipelines that reduce cost and maximize flexibility. Voice and data communication can now co-exist and flow freely through the same bandwidth. Calls can easily be configured to simultaneously ring multiple devices, hunt to wireless or home phones, route to voice mail or forward to another call center.

Communication management is now a multi-pronged approach that combines statistics from various facilities to identify billing irregularities, misuse, bottlenecks, inactivity, productivity or workforce expense.

Billing reconciliation is often overlooked since carriers always bill based on contracted tariff plans, right? According to analysts at Gartner, “Organizations can routinely save more than 10% of their annual telecommunications expenses by systematically checking their carrier bills against equipment and services in use.” But it is no longer effective to look exclusively at your traditional telephone invoices and compare them to the call accounting system in the back room.

The old adage rings true today “you cannot manage what you cannot measure”. Call accounting is no longer the killer application of current times but it is certainly a necessary component. Leading edge communication management systems now collect system logs, Internet usage reports, router statistics, voice mail logs, CCR, hunt group information and various device-dependent logs as well as traditional call detail records (CDR).

Have you ever called your favorite electronics store to inquire about the latest digital cameras but got trapped in a series of never-ending prompts about store hours, hard drive specials and video games? Many companies are taking advantage of communication management systems (CMS) that study activity from automated attendant and custom call routing trees. These reports help pinpoint whether calls are being prematurely dropped, abandoned or misdirected. It is imperative that customers are quickly and efficiently routed to their desired destination. The customer experience with your communication facilities will dictate whether they return.

Cost allocation to various corporate levels has been a basic functionality of most robust call accounting system for years. The downward trend of long distance expenses due to falling carrier rates, bundled services and VoIP competition has lessened the importance of this feature. This has resulted in the misconception that call accounting is no longer relevant. However many companies forget that there are many hidden costs that can be highlighted through proper use of call accounting or communication management software.

If Jimmy in sales spends half his time talking on the phone, management might be thrilled at his dedication. However if Jimmy is spending half his time talking to his girlfriend, perhaps management should take a second look. Call Accounting can be a key indicator of misuse and employee productivity. Employee productivity recovery is one of the primary reasons to own a system today!

Often fraudulent calls may be routed through corporate facilities without the knowledge of the company. Hackers can find faults in improperly designed networks, infrequently used extensions, voice mail ports and tandem trunks. A call accounting watchdog should always be monitoring activity for irregular patterns. Modern call management systems utilize SMS, pager, email and web interfaces for instantaneous reporting.

Communication management is imperative in providing the proper metrics for migrating to IP. Most companies do not even have a proper migration strategy. Call accounting can help ease the transition by highlighting traffic volumes, peak hours, grade of service, abandoned calls, blocked calls, calls to reception and various other peg counts. These statistics will help determine the bandwidth needs and requirements for auto attendant, wireless, IVR and other services.

Some communication management systems have been established interoperability with major manufacturers such as Nortel, Cisco and Avaya. These systems often provide more tight knit integration through third party call control. These solutions often enhance the hardware by adding such features as: forced and verified account codes, call trace, set locking and real time emergency notification.

Often companies forget about the need for pinpointing the source of a telephone call in case of an emergency. Many call accounting systems have built-in real time alarm triggers that will alert authorized personnel of an emergency call. This feature is crucial when seconds could mean life or death.

Call accounting has definitely evolved and matured into communication management. The need for this software is more important than ever.

Discover the Best Accounting Software

One of the most important decisions that you will have to make while starting or operating your small business is that of which accounting software to use. It could certainly be a nightmare if you make the wrong choice. Artikel Murah Berkualitas

During the past 20 years accounting software has advanced far beyond the old fashioned basic lined accounting books with 'in' and 'out' columns. Nowadays it is certainly possible to find accounting software that will assist you in all of your personal and business accounting tasks, from accounts receivable to online banking. With such a wide array of accounting software packages available, It can be difficult to decide which accounting software program will best fit your needs.

Before choosing an accounting software program it is worth while that you give some thought to exactly why you desire the program in the first place. There is really or no point in buying a software program that enables you to keep track of accounts receivable and issued invoices if you just need the software to do your home budgeting. On the other hand, if you are a small to medium business, then it's quite likely that the ability to manage your issued and outstanding invoices is essential.

Many people will probably want to consider the tools or resources available for the software to help them get started. Any good accounting package should come with a setup guide and preparation check list to ensure that everything goes smoothly. Most will also offer a guided tour and instructional demos to help you learn about key tasks. Extensive product support should also be available.

The form in which the accounting software package is going to interact with your other software is another factor that you need to consider. For example, if you make use of online banking, then a very useful feature would be the ability of the software package to update with your online bank statements. Furthermore, if you possess a number of different income streams, and you find it necessary to be sure that all of them are being included in your budget, then software that allows you to take advantage of this facility may be beneficial. However, if all you have is one or two income streams and all you want to do is keep a track on what your household outgoing expenditures are, then you might just need a simple Excel accounting software package.

Finally, before making a choice on any particular accounting software package, it would be best to make sure your computer has the correct system requirements for the application. For example, you should make sure you have enough room on your hard-drive to download the program and that you don't already have the applicable software on your system. Bear in mind that there is nothing more frustrating than acquiring a new software package only to find out that it's not compatible with your computer setup.

In conclusion, you can probably see that the issue of choosing the best accounting software is not a simple one. All in all probably the most important factor is ease of use, since you're going to have to work with the software nearly every day if you own a small business.

Does Outsourcing Your Accounting Make Sense For Your Small Business

Outsourcing accounting services has long remained a privilege reserved only for larger corporations. But now, the affordability and cost effectiveness of using outsourced accounting services is attracting small businesses as well. Small businesses normally have a lot of functions and very less resources for completing them. Using expert bookkeeping and accounting service providers for outsourcing accounting functions save small businesses a lot of resources, which can then be utilized somewhere else within the business. Artikel Murah Berkualitas

But the main query a small business entrepreneur will have is this: Is outsourcing accounting services really worth it for my small business? The answer to this is complicated and requires evaluating the pros and cons of using a firm for financial functions of the business.

There are advantages attached to hiring a firm for outsourced accounting which are especially applicable to small businesses:

* The first and most important advantage of using an outsourced accounting service provider is its cost effectiveness, with an attractive possibility of saving up to 40% costs compared to in-house hiring.

* Small business accounting requirements can be handled easily by expert bookkeeping and accounting service providers through their expert staff

* You can choose to hire only those services which are applicable to your business

* You save valuable time by using accounting services which you can then dedicate to the core business activities

* You don't have to hire, train or retain in-house accounting staff

One drawback that can be associated with outsourcing accounting functions is that there are many companies which are into the domain of accounting services and it is a difficult task to filter out the experienced and genuine ones from the inefficient ones. So select an accounting service provider with a lot of care, and take the following factors into consideration:

* Does the outsourced accounting service provider have experience in your industry?

* Can it provide valid references of its current/past clients?

* Has it dealt with accounting functions of small businesses?

* Can the accounting service provider provide doorstep service if required?

* Is the accounting firm ready to sign a contract with you detailing the terms and conditions and guarantees of service?

* Is the accounting service provider flexible enough to allow you to scale your bookkeeping and accounting requirements up or down?

* Are the data security measures of the outsourced accounting service provider in question enough to protect sensitive information related to your small business?

In case you get positive responses to most of the questions posed above, you can rest assured that the firm you are considering outsourcing accounting services to is an appropriate one for your business.

There are many advantages of outsourcing accounting services for small businesses, which far surpass the disadvantages. If you get the right service provider, it can become a partner in helping you develop your small business. As a small business owner, you can consider hiring a professional bookkeeping and accounting service provider who will help you focus on the core activities of the business and grow it appropriately.

Enhance The Modus - Operandi Of Your Business With Accounting Outsourcing

The concept of outsourcing is becoming a preferred choice in many sections of company. Today businesses are outsourcing tasks like production, marketing, research and sales; no doubt that they are getting great expediency and monitory benefits as specialized functions can be better performed by outside service providers than internal employees. Artikel Murah Berkualitas

There are many tasks in an organization that need high expertise and extra care; accounting is one of those tasks that need expert handling. Accounting outsourcing is the ultimate way to cut the accounting cost and improve the efficiency of business functionaries. It helps businesses in managing every accounting task in such a manner so that it may help in achieving maximum profit. Globalization and consumer expectations are becoming the driving force that lead businesses towards outsourcing services and unquestionably such survives are making a big difference in the modus-operandi of these businesses.

As accounting is the art of organizing, maintaining, recording and analyzing financial activities therefore accuracy and perfect monitoring is the key requirement. Accounting information is needed at every level of management as it enables them in performing their task effectively. Business transactions keep a record of economic events that help managers in evaluating the financial position and visualizing strategies to avoid unproductive steps. With a limited accounting, staff no business can manage every aspect of financial recording and this is the reason why businesses make steps towards accounting outsourcing.

By the time you outsource your accounting activities you start getting accuracy in every transaction. The only reason behind it is the expertise the hired accounting outsourcing firm owns. An expert accounting outsourcing firm can lighten all possible accounting burdens and can make you feel free for pondering over sales and profit improving plans. As every business requires new skills, deeper resources and superior capabilities for expansion, for having all these brilliant tools every company recruits highly qualified professionals. If one can afford to employ sufficient human resource, then it is excellent but there are some businesses that cannot to pay a large amount of their resources to accounting professionals. Certainly accounting outsourcing is equivalent beneficial but less expensive.

Outsourcing your accounting task is somehow a challenging decision, as results will totally depend on the effectiveness of your selection. Wise selection of accounting outsourcing firm is very crucial as a wrong selection can waste your efforts and resources. To get a suitable accounting outsourcing service provider, one can go through profile of various service providers. With this one will be able to find out the most pertinent choice as he will get multiple options to choose. Cost comparison is another thing that is essential before hiring an accounting outsourcing firm since you may miss a more cost cutting option just because of less research.

Accounting outsourcing can do wonders in your business if chosen wisely and after a detailed market research. Outsourcing is necessary to react gracefully to market challenges, as an organization cannot manage to track a vast task like accounting.

Evolution of Accounting

Accounting has been called as the language of business. Accounting is the system which measures business activities. It processes activities in business into reports and communicates the results to top management. Let us now look through the advancement of accounting. Artikel Murah Berkualitas

Ancient Accounting

As early as 8500 B.C., accounting has already existed. Archaeologists have found clay tokens as old as 8500 B.C. found in Mesopotamia which were usually cones, disks, spheres and pellets. These tokens correspond to such commodities like sheep, clothing or bread. They were used in the Middle West in keeping records. After some time, the tokens were replaced by wet clay tablets. During such time, experts concluded this to be the starts of the art of writing. Examples of ancient civilizations keeping account records are China, Babylonia, Greece and Egypt. Like in Babylonia during 3600 B.C., payments of salaries were recorded in clay tablets. In addition, the rulers of these civilizations keep track of labor and material costs used in building structures using accounting. A good example is the case of the Egyptian pharaohs in building their magnificent pyramids.

Middle Ages

During the thirteenth to the fifteenth centuries, trade flourished places such as Florence, Venice and Genoa, thus, there was advancement in account keeping methods, thanks to the merchants and the bankers of such time. during the 1211 A.D., one of the systems in accounting was kept by a Florentine banker. However, the system was primitive as the concept of equality for entries was absent. Double entry records first came out during 1340 A.D. in Genoa. In 1494, the first systematic record keeping was formulated by Fra Luca Pacioli, a Franciscan monk and one of the most celebrated mathematicians to this day. Pacioli is considered as the father of accounting.

Industrial Revolution

The industrial revolution which was characterized by great changes in working and business transactions paved way to the specialized field of accounting called cost accounting in order to meet the need for the analysis of various costs. In addition, since there was a development of the corporate form of organization, there was a need for a separate and independent report to assure the management's financial representations are reliable. Information Age

At present, there have been tremendous advancements in accounting to meet the needs brought about by information technology. Those duties that required manual, tedious and time-consuming methods can now be done using the computers which make work faster, more reliable, accurate and precise. True enough, business transactions have changed and evolved. Businesses can now be transacted virtually making it faster and hassle free. Businessmen transact their businesses without even facing one another has become possible all because of information technology. With the advancement of businesses, accounting has also advanced to meet the needs of businesses at this day. There has been a great quantity of applications and elements of accounting that meet up the various needs of businesses. As they often point out, as a smart businessman, one must breathe in information technology to keep up with the trend and stay competitive.

Finding the Value of Business Accounting

The importance of business accounting is to gather information valuable to improving the company. It uses different sources to accommodate the needs of any specific company. The misconception about business accounting is that it is only used for recording and storing data. While it does accomplish this, it is also very dynamic. This versatility is useful for making decisions, improvements, and up-dates. Artikel Murah Berkualitas

This business accounting information can indicate many opportunities in a business. A company can examine the supply costs of each service they provide to find which is the most profitable. Then more emphasis can be put on marketing and selling that service more often. Looking over past years sales, in the accounting, can be helpful in forecasting seasonal product demands to take advantage of.

The main function of any business is to produce income through sales or services. Keeping track of money earned and money received, therefore, helps fulfill this primary business motive. Businesses can easily get caught up in their daily tasks that actually collecting payment can be overlooked. After slowing down, a company will understand that missing collection of payment not only causes missing out on revenue, but the company actually pays for any expenses for the service. Losing out on income, coupled with paying for supplies is a double whammy. This is another reason why business accounting is valuable.

Inefficient procedures in sales, supplies, staffing, or marketing, can be highlighted by business accounting. For example, the figures for supplies show that $300 a month is spent on paper. The normal purchase procedure may be to run down to the local store when the paper supply gets low. It could be a good idea to buy the $300 of paper in bulk each month. This improvement will save transportation time and save money through a bulk purchase. An accounting history of jobs performed can show which jobs were done most efficiently and duplicate that process in the future.

There are several different ways to track business accounting. The methods range from simple calculations of a few sales to complex formulas for hundreds of transactions. If very basic adding and subtracting is needed, it can be figured with a pencil and paper. Computer applications, such as Microsoft Excel, can help automate the actual computations. Software Programs like QuickBooks calculates, categorizes, and forecasts financial information. Online Accounting is similar to a software program, but accessible anywhere with internet access. Finally, for long-term in-depth recording, certified public accountants can assist to make sure all the bases are covered and optimize the tax process.

In summary, business accounting is very versatile and is very valuable when performed effectively. The benefits range from finding and capitalizing on new niches, confirming that payment has been received for work completed, and help multiple facets of the company run more efficiently by eliminating wasted resources. There are many different tools to help with accounting to make sure that it is being done easily and correctly. In the long run, leveraging any one of these tools can benefit a company multiple different ways

Fund Accounting Software

Fund accounting software is usually used by large organizations with complicated accounts to be managed. Fund accounting software is also used by non-profit organizations which are dependent on funding from external agencies. Fund accounting software is getting increasingly sophisticated by the day, with the regular addition of added features.

Non-profit organizations need fund accounting methods, for maintaining track of their funding. In order to do that, they usually maintain a separate balance sheet date for each account. The balance sheet consists of things like assets, liabilities, or fund balance. Fund accounting software is therefore advanced software ideally suited for complex accounting functions. Smaller businesses which do not require such complicated calculations usually go in for other relatively simpler software like QuickBooks or One-Write Plus.

There are many vendors in the market with their own version Artikel Murah Berkualitas of fund accounting software. While going in for fund accounting software, it is always recommended that you check whether the package is complying with the regulations being promulgated by the Financial Accounting Standards Board. This is important particularly in the case of non-profits who have to tabulate gifts and present their financial information in the form of audited statements.

The smaller nonprofits usually go in for fund accounting software with relatively lesser number of features, enabling them to do things like generate simple financial reports. The larger nonprofits usually go in for the more advanced versions of fund accounting software with additional features, enabling them to perform complicated accounts. Whatever may be the size of the nonprofit, one thing to keep in mind is to have an accountant or a bookkeeper with domain area expertise, which will help in using the software in the first place. This is important because inexperienced staff will find some of the software difficult to understand and therefore use.