When you hear the word "accounting," what comes to mind? It must have something to do with money. There may be accounting terms that everyone knows. But not everyone knows what accounting is and how it can be used in everyday life. Whether we know it or not, many of the things we do every day have something to do with accounting. For instance, when we make a purchase and get a receipt, this is an example of receiving accounting information.
Accounting is the process of collecting, recording, summarising, and analysing information about money or financial transactions. It can be used in everyday life because it keeps a business financially healthy and helps it grow. Accounting is an important part of running a business because it helps you keep track of your money, manage it, and make sure you're following the law, all of which can help you make business decisions. So, accounting is a job that requires skills that are also useful in everyday life. Even now, accountants are still in high demand in business or in a company, because their work is so important.
Accounting is used more and more in businesses, which is true. But keeping track of your own money is also very important. The goal is to organise or keep track of our money so that it stays stable or "healthy." People use accounting in their daily lives without even realising it. For example, budgeting and keeping track of your spending are big parts of accounting. We can find out where and how our money is spent. We can also keep track of where our money comes from and how much of it we get. How can we then use accounting in our everyday lives, especially to keep track of our money? We can start by keeping a record of our money in a journal. Our expenses for a month, from the smallest to the biggest, will be written down in journals. We can also keep track of how much money we make each month. This way, at the end of the month, we can see how much we spent and plan how much we will spend next month. This could be a way to make our money work better and save money.
Also, financial reports can be made in the form of cash flows. For example, money for savings, money for spending, or money set aside for a specific purpose can go to an emergency fund. We can do it by using a simple idea that we can all understand. By keeping good records, we can figure out how our money is doing. For instance, cutting costs that aren't thought to be as effective and efficient. Accounting helps us plan our finances for the next time period so that we can keep our finances in good shape. People might say that our financial situation is uncertain, especially during the pandemic, so we need to spend money more wisely based on what we need.
Accounting can also be used to make plans for the future. Accountants and auditors usually look at a business's past financial information to figure out how it will do now or in the future. The financial report has a balance sheet, an income statement, a change in equity statement, and a cash flow statement. By looking at a company's past financial records, auditors can predict and present the company's financial report. Also, they can find out how hard the transactions were. So, now that auditors know what the problems are, they can work to solve them.
The third place where accounting can be used is in business. If we have a business, you need to use what you know about accounting. For example, if your business is an online store, you need to keep track of every transaction to keep track of the money. Also, you need accounting skills for any business you run if you want to make money and run it well.
So, accounting is a very useful skill in our everyday lives. By keeping an eye on, controlling, and planning our money, we can keep track of how much comes in and how much goes out. If you do this accounting task every day, it will help you a lot to get a better handle on your money.
Do you want to work in accounting and finance, are you already working and want to move up in your career, or simply want to change careers?
Here at Ujuzingo, we're all about helping accounting and finance professionals succeed in their careers. We offer certification courses, career guidance and job openings to help you get ahead in this industry. If you're interested, be sure to check them out!