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Basic concepts of accounting

Accounting refers to the organizational area or department of a company that is responsible for all accounting.
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What is accounting for?

Many fail in accounting because the connections and meaning of business accounting are not really clear to them. Both business and business profession students have a relationship with accounting similar to the one they have with math: "Why do I need that? I'm not going to be a controller anyway." It may be true that 90% of the time you won't have anything to do with management accounting in practice. But you have to think a little further ahead, because accounting teaches you how a company works from a financial point of view. And one thing is for sure: if you aspire to a middle management position with budgetary responsibility, the fundamentals of cost and performance accounting are mandatory....

What are the sub-areas of accounting?

Depending on the size of the company, accounting can be divided into several sub-areas.

The finance department documents all transactions necessary for the balance sheet and income statement. The payroll department's tasks are to process employee payrolls and calculate social security and health insurance contributions. The accounts receivable and payable department processes customer receivables as well as trade payables. Asset management is used for external accounting and manages all assets owned by the company. Cost and activity accounting is part of internal accounting. It provides data for planning costs and revenues and is responsible for their control.

Your in-house accountant must always be up to date with the latest case law. To do this, you will need to budget for additional education and training costs. You also need to budget for the cost of educational materials.

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