Accounting Software

Document Sample
Accounting Software Powered By Docstoc
					Best Business Accounting Software

When talking about the best business accounting software, you must first
know the relationship between finance and accounting. Conceptually
speaking, they are closely related to the extent that accounting is an
important input in financial decision making and there are key
differences in viewpoints between them. Accounting is a necessary input
into finance. That is, accounting is a sub-function of finance.

Accounting generates information or data relating to the operations or
activities of the firm. The end-product of accounting constitutes
financial statements such as the balance sheet, the income statement
(profit and loss account) and the statement of changes in financial
position (sources and uses of funds statement). The information contained
in these statements and reports assists financial managers in assessing
the past performance and future directions of the firm and in meeting
certain legal obligations, such as payment of taxes and so on. Thus,
accounting and finance are functionally closely related.

But there are key differences between finance and accounting. The first
difference relates to the treatment of funds while the second relates to
decision making. The viewpoint of accounting relating to the funds of the
firm is different from that of finance. The measurement of funds (income
and expenses) in accounting is based on the accrual system. For instance,
revenue is recognized at the point of sale and not when collected.
Similarly, expenses are recognized when they are incurred rather than
when actually paid. The accrual-based accounting data do not reflect
fully the financial circumstances of the firm. The viewpoint of finance
relating to the treatment of funds is based on cashflows. The revenues
are recognized only when actually received in cash (i.e. cash inflow) and
expenses are recognized on actual payment (i.e. cash outflow).

Finance and accounting also differ in respect to their purposes. The
purpose of accounting is collection and presentation of financial data.
It provides consistently developed and easily interpreted data on the
past, present and future operations of the firm. On the other hand,
financial manager's major responsibility relates to financial planning,
controlling and decision making. Thus, in a sense, finance begins where
accounting ends.

Business Accounting Software provides detailed information on Business
Accounting Software, Best Business Accounting Software, Free Small
Business Accounting Software, Small Business Accounting Software Reviews
and more. Business Accounting Software is affiliated with Small Business
Accounting Software [].

Shared By: