The role of accounting in companies

In order for companies to be successful, departments should know what to do, their goals should be separate and implemented. For example, the sales department should organize the sale of the company's products and services, the human resources department should select the right employee for the right department at the right time and do his career planning, and the marketing department should realize the recognition and branding of the company in the local and foreign markets.

The financial department is at the center of the company, and it ensures the numerical expression of the activities of all departments. Therefore, it is necessary to keep several accounts in parallel in companies. We can dispose of these accounts as follows:

  • Accounting
  • Financial Accounting
  • Tax accounting
  • Account management

        Accounting is the accounting of the company's activities. International accounting standards (ACCA-Association of Chartered Certified Accountants) are available for this. The main purpose of these standards is to establish companies' accounting according to uniform standards, which in turn serves to easily compare companies.

       Financial accounting - begins at the point where financial accounting ends. Thus, finance prepares 5 main financial statements (Balance sheet, Profit and loss statement, Cash flow statement, Statement of changes in equity and Disclosure statement) using the figures recorded by accounting.

       Tax accounting - the basis of tax accounting is the tax system of each state. In Azerbaijan, it is the tax code. As you can see, tax accounting and accounting are completely different concepts and management bases are also different. Yes, although there are similarities, it does not mean that if we do accounting in the company, it also replaces tax accounting.

       Management accounting is the process of collecting, analyzing, and making decisions to manage the company's production-commercial process. Financial accounting reports are used by entrepreneurs and external users, while management accounting is used by managers and directors.

As you can see, the mentioned accounts are all very important in their own way. If these accounts and analyzed figures are not correct, of course the decisions made will not be correct.

It is necessary to prepare the company's accounting, financial accounting and other records very carefully. For this, the services of professionals should be used.