Modern Accounting for SMEs
Accounting is the
discipline that is responsible for quantifying, measuring and analysing operations to provide useful information for the process of making economic
decisions by studying the heritage and presenting results through the financial
statements of an organisation.
At the beginning of the
19th century, the industrial process began its successful career by the
development of the SMEs. It is at this time when the Accounting begins to undergo the
changes of substance and form, which under the name of accounting principles
are currently still arousing.
With the passage of
time the industries has become revolutionized, with this emerging trend the
SMEs has faced complexity in the development of monitoring systems for cost analysis and decision making. Cost
accounting system is necessary for every industry and organization whether it
is manufacturing or trade. On the basis of this need modern cost accounting has
founded.
Cost accounting affects
not only the manufacturing companies, allowing them to know the direct and
indirect costs involved in their processes such as labour, materials and general manufacturing costs, such as
electricity, machinery, administrative expenses, taxes, etc. It is also important for the service providers so that
they can know the cost of labour and
materials involved in the performance of a certain task and that ultimately is
where their assets are located.
Cost accounting
correctly applied allows to develop in prosperous times and build more profitable
SMEs against competitors and thus be able to project future actions are preventing fluctuations in the
market. In this way, it involves the classification, accumulation, allocation
and control of the expenses generated in the manufacture of the items.
The accounting does not
focus solely on presenting the result of the economic activities to the
authority to comply with the fiscal obligations making the payment of
corresponding taxes before the Ministry of Finance. If not, it goes further,
helping to examine the finances of small and medium enterprises (SMEs); and
from this information to make strategic decisions to increase the profitability
of the company.
It can be said that the accounting does not focus
solely on presenting the result of the economic activities to the authority to
comply with the fiscal obligations making the payment of corresponding taxes
before the Ministry of Finance. If not, it goes further, helping to examine the
finances of small and medium enterprises (SMEs); and from this information to
make strategic decisions to increase the profitability of the company.
Comments
Post a Comment