It delivers clarity on every financial transaction and provides the foundation for strategic planning, performance monitoring, and informed decision-making. Without a solid financial management framework, businesses risk losing control over costs, cash flow, and regulatory compliance.
What is accounting?
Accounting is a central area of business administration and is essential for the proper management of a company. It encompasses the systematic recording, evaluation, and monitoring of all financial transactions within a company. The aim is to enable the planning, control, and management of company activities.
Accounting tasks
Standard accounting is divided into various areas of responsibility:
- Documentation: All business transactions are documented using receipts and invoices to ensure complete and systematic recording.
- Information: The recorded data provides important information for company management and external stakeholders such as tax authorities and investors.
- Control: The success of business activities can be monitored through the internal exchange of information. This includes controlling profitability and liquidity.
- Planning: The preparation of figures serves as a basis for strategic decisions and the future direction of the company.
Areas of accounting
- External: Also known as financial accounting, this involves the preparation of annual financial statements, balance sheets, and profit and loss statements. It is aimed at external audiences such as tax authorities and investors.
- Internal: This includes cost and performance accounting, business statistics, comparative calculations, and planning calculations. It is used for internal management and control of the company.
Importance of accounting
Without a functioning accounting system, it would be difficult for companies to assess their financial situation and make informed decisions. It forms the core of corporate management and is crucial for the transparency and traceability of all financial transactions.
An ECM system can facilitate these tasks by enabling automatic checks and reports. This allows companies to ensure that all invoices are archived correctly and sensitive data is protected. Automated invoice workflows streamline and simplify these processes even further. This not only contributes to legal certainty, but also to the efficiency and transparency of business processes.