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The accounting function
An accountant has three main responsibilities. These are to:
- Collect a firm's financial records e.g. receipts, invoices, cheques and statements.
- Maintain the book-keeping and construct accounts.
- Analyse and interpret the information.
Once all the individual departments' financial records have been collected, the
accountant can construct the company's accounts. This body of accounts is often
known as a ledger and includes a sales ledger,
bought ledger and cash book
amongst others.
The accountant then analyses the information using various accounting ratios and
formulae. The purpose of this is to identify any trends by comparing the results
with previous results. Any trend, whether positive or negative, could affect the
planning for the next year.
Accountancy is a specialist area with its own technical language. As a result, the
accountant will have to interpret his/her findings into a meaningful format. Other
managers can then understand the information and will then be able to work together
to plan and set budgets for the next year.
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