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What is accounting?

Accounting refers to the organizational area or department of a company that is responsible for all accounting.
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Accounting: what exactly is it?

Bookkeeping refers to the organizational area or department of a company that is responsible for all accounting. Its most important task is the systematic and chronological recording of all business transactions or changes in value within a given accounting period, which, in addition to salary payments, also affect the company's liabilities and assets. At the end of each financial year, the annual financial statements are prepared, for which the accounting provides all relevant data, which in turn form the basis for the preparation of the balance sheet and income statement in the company. The annual financial statement is a prerequisite for determining trade tax, corporation tax and income tax. During the year, the tasks of the accounting department include, for example, making the advance sales tax return to the tax office and accounting for invoices or all business transactions.Correct accounting makes it possible to discover the company's weaknesses and provides information on its liquidity.

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.

What is the difference between accounting and bookkeeping?

In colloquial language, both terms are often used interchangeably. However, this is not correct, because the meanings of the two terms differ. Thus, accounting is understood to mean the complete recording of all business transactions of a company. This record is usually kept by a separate department, the so-called accounting department.

Outsourced accounting services: Flexible models

Not all companies find it useful to completely outsource internal and external accounting. Fortunately, there are a variety of outsourcing solutions that can flexibly deliver tax advisors and accountants.

You can outsource the following areas of accounting:

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Financial accounting

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Accounts receivable and accounts payable

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Profit and loss statement

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Annual financial statement

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Evaluation of the company

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Tax returns

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Advance sales tax return

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Payroll accounting

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Payroll preparation

Setting the criteria for external accounting

Before deciding on an accounting service provider, you should define your own quality criteria. In any case, you should pay attention to these key facts:

Price/performance: Prices are within budget, but not suspiciously low. The latter may already be a first indication of a lack of quality services.
Liability: The service provider assumes responsibility for any errors. In this way, you will not have to fear that the Tax Agency will hold you responsible for these errors and even impose fines in serious cases.
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