Magical Business Documents

In many ways, running a business is like playing a game, and be aware of the business is very similar to analyzing games such as baseball. True sports fans know that hundreds of statistics such as batting average or runs obtained. Similarly, if you’re serious about your business, you should be able to quantify the statistics describing the operation of the business. The general accounting and financial statements in particular, are the tabs (notes) to evaluate the results, so it is called “The Language of Business”

The accounts reflected the actions that are performed in the business world in a set of numbers used for making decisions based on information, capture information on the operation of a company, hundreds of obstacles will be overcome and about your future expectations.

The accounting rules allow a comparison between similar firms and between firms in other industries, such comparisons are important when you are looking for funds to expand the company, such as loans or capital from new investors.

By following the rules, there are opportunities to succeed or to receive fair treatment in a highly competitive market. It does not take an expert to make good decisions, usually something as simple as subtracting expenses from income in determining taxable profit (utility).

There is a common tendency to consider accounting as an exact science governed by rules of arithmetic, but the numbers generated are actually estimated. Although rules, procedures and methods make the numbers look like absolute facts, they are not.

However, the numbers represent how business is handled. The balance sheet and income statements are not commandments but guides and have different uses.

There are two types of accounting and financial reporting, these are:

Management accounting: that provides information to decision makers and is part of the company. Whether you want to introduce a new product on the market, analyze the information related to costs, prices, demand and competition, to evaluate the potential of the product, etc. according to the information available.

Financial accounting: it provides information to decision makers and outside the company, as investors, creditors and government. Suppose you want to raise funds by issuing the company by issuing shares to the investment community, likely to require detailed accounting and financial information to make an informed investment.

An example is when deciding whether to introduce a new product or take any other administrative decision, is used an analytical framework more flexible working when trying to attract capital from the investment community. In this sense, the main intention of this document is to ensure that the information is as useful as possible for purposes of internal decision making, is management accounting.

Accounting quantifies the everyday world of buying and selling. Would you buy something at a higher price than he could sell it? Of course not, however, many companies do it year after year. All too often, businesses are only direct costs, evil is housed in the details, and finance and accounting help to keep the demons in their place.

Ines Maria Moran holds a degree in Biology with specialization in Food Technology, also has a Masters in Business Administration. For more than seven years, joined the team believes the potential Action COACH Business Coaching, and owners committed to supporting small and medium enterprises. He is currently Chief Operating Officer of the master franchise of Action COACH Latin America, taking in charge of customer service and support over 60 coaches.

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