Understanding Business Accounting For Dummies, 2nd Edition by Colin Barrow, John A. Tracy Read Free Book Online Page B

the lead person in the financial planning and budgeting process of the business organisation. Furthermore, the Financial Controller designs the accounting reports that all the various managers in the organisation receive - from the sales and marketing managers to the purchasing and procurement managers. These internal reports should be designed to fit the authority and responsibility of each manager; they should provide information for managers' decision-making analysis needs and the information they need to exercise effective control.
The Controller also designs and monitors the accounting reports that go to the business's top-level executives, the chief executive officer of the business, and the board of directors. All tough accounting questions and problems get referred to the Controller. The Controller needs good people management skills, should know how to communicate with all the non-accounting managers in the organisation, and at the same time should be an ‘accountant's accountant' who has deep expertise in many areas of accounting.
Smaller businesses may have only one or two ‘accountants'. The full-time bookkeeper or office manager may carry out many of the duties that would belong to the Controller in a larger organisation. Smaller businesses often call in a chartered accountant in public practice to advise their accountants. The chartered accountant may function more or less as a part-time Controller for a small business, preparing the annual income tax returns and helping to prepare the business's external financial reports.

Chapter 2 : Bookkeeping 101: From Shoe Boxes to Computers
In This Chapter
Understanding the difference between bookkeeping and accounting
Following the steps in the bookkeeping cycle
Managing the bookkeeping and accounting system
Getting down the basics of double-entry accounting
Deterring and detecting errors, irregularities, and outright fraud
M ost people are pretty terrible bookkeepers just because they really don't do much bookkeeping. Admit it. Maybe you balance your chequebook against your bank statement every month and somehow manage to pull together all the records you need for your annual income tax return. But you probably stuff your bills in a drawer and just drag them out once a month when you're ready to pay them. (Hey, that's what we do.) And you almost certainly don't prepare a detailed listing of all your assets and liabilities (even though a listing of assets is a good idea for insurance purposes). We don't prepare a summary statement of our earnings and income for the year or a breakdown of what we spent our money on and how much we saved. Why not? Because we don't need to! Individuals can get along quite well without much bookkeeping - but the exact opposite is true for a business.
One key difference between individuals and businesses is that a business must prepare periodic financial statements , the accuracy of which is critical to the business's survival. The business uses the accounts and records generated by its bookkeeping process to prepare these statements; if the accounting records are incomplete or inaccurate, the financial statements will be incomplete or inaccurate. And inaccuracy simply won't do.
Obviously, then, business managers have to be sure that the company's bookkeeping and accounting system is adequate and reliable. This chapter shows managers what bookkeepers and accountants do - mainly so that you can make sure that the information coming out of your accounting system is complete, timely, and accurate.
    Bookkeeping versus Accounting
Bookkeeping is essentially the process (some would say the drudgery) of recording all the information regarding the transactions and financial activities of a business - the record-keeping aspects of accounting. Bookkeeping is an indispensable subset of accounting. The term accounting goes much further, into the realm of designing the bookkeeping system in the first place, establishing controls to make sure that the