As an individual or a business, all have records, classification, and summaries regarding money, bonds, investments, and all. And, the art of maintaining these data in a specific way is accounting. Accountings always helps us not to maintain those, even making new strategy and planning in businesses. There are many parts to accounting but after doing hypothesis and collaboration the main three parts are 1. Financial, 2. Cost and 3. Management. This important parts analysis means doing all the parts analysis in accounting.
Financial
Apart from all of the parts, the main three parts are 1. Balance sheet, 2. Profit & Loss Statement, and 3. Cash flow statement.
1st one can prepare at any time based on a certain amount of time, 2nd and 3rd ones are prepared based on a fixed accounting period. Similarly, the Balance sheet is for our financial position. It shows the funds, assets, and liabilities. Keeping the long-term, most essential, valuable assets and selling the non-valuable ones. Maintaining the payables, capitals, etc. The Profit & Loss statement for analyzing the net profit, taxes, earnings, various costs, etc. Furthermore, Cash flow is to see the money flows of cash, bonds, depreciation, etc.
Some other important statements are also there to do analysis as well as, can analyze market share and all from those parts of financial accounting.
Cost
Costs play a major function in every business. Supply chain, operations, manufacturing, or anywhere we have to contribute money to give efficiency in our products and services. But according to the market situation, technology, disruption, and completion we have to survive and maintain the cost of our products and services. Because if we cut down the cost then we will get more margin and profit.
In this case, we have to prepare a cost statement and cost data for doing analysis. Sometimes we have to increase and sometimes we have to decrease.
Management
In simple words, managing the accounting data and information. In the company, we generally build a team that manages these accounting sections. Similarly, some team manages other companies’ and leaders’ accounting sections. Freelancers, manage their accounting section all by themselves.
Either using software or any other tool we collect or input the recordings and data. manage and maintain this data and od analysis. Furthermore, we prepare statements like balance sheets, P&L, costs, etc. Sometimes, we have to analyze this data to manage other parts of a project. It’s based on goal, target, project’s need, strategy, etc.
Managing the financial data and recordings is a crucial part. Because it helps us build strategy, see positions, markets, and all.
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