Accounting: A Simple Definition
All businesses must deal with accounting daily. It is a crucial process for determining the financial health of a company, monitoring gains and losses, keeping track of assets, staying compliant with taxation requirements and financial regulations, and more. But what does the term “accounting” actually mean, and how can your business handle this complex concept in a simple, straightforward way? In this post, we will attempt to answer both questions, while also providing tips for simple accounting software you can use to streamline your business’s bookkeeping.
Definitions of accounting are usually complex and multifaceted—not surprising for a process that encompasses so much detail and information. In the simplest of terms, accounting is the process of recording information that pertains to the financial transactions of a person or business. The complexity creeps in when talking about the tracking, retrieval, summary, or reporting of this information—all steps that can also be referred to as part of the accounting process.
For an individual, accounting is often simple, involving little more than tracking expenses and earnings, budgeting on a weekly or monthly basis, and paying taxes each year. While a piece of home accounting software can be useful for individuals, many people are content to handle their budgeting using spreadsheets and other manual tools.
For a business, accounting is quite a bit more complicated. For one thing, companies are just bigger, which means they have more transactions to track and are often trading in much larger transactions. Additionally, business accounting has more stakeholders. More people are looking at a company’s accounting insights and using them to make decisions, compile reports, or execute other functions. As such, accounting information needs to be tracked, categorized, and organized in a way that is informative, useful, and easy to understand for anyone who looks at it. Where an individual can develop an idiosyncratic accounting strategy that only they truly understand, such an option is not realistic for a business.
The question, then, is whether streamlining accounting is even possible in a business environment.
Perhaps counterintuitively, the best way to streamline accounting in a business setting is to split it up across multiple different statements. An individual’s accounting may consist mostly of tracking their spending—a practice that helps with budgeting and responsible money management. For a business, “streamlined accounting” isn’t just about lists of transactions, but about documents that define and organize the information around those transactions meaningfully. Such statements may include the income statement, the balance sheet, the statement of cash flows, and the statement of shareholders’ equity. Each one is intended to track certain financial activities—and provide precise financial insights—spanning specific periods.
Streamlining Your Accounting
Many businesses at least start by tracking their accounting manually in spreadsheets and other documents, simply because this method is what most people are accustomed to. As your business grows, though, you may find yourself typing in Google searches such as “best free accounting software,” “open-source accounting software,” or “cloud accounting software,” seeking an affordable program to help you track accounting information and prepare financial statements more efficiently.
At ZarMoney, we are proud to offer the accounts receivable and accounts payable software you need for your small business. Use it to track everything from payments to inventory, all while enjoying terrific features such as accessibility from any device, collaborations with teams, Google Calendar task integration, and more. The full-featured single-user version ZarMoney is an accounting software free download, making it a perfect option for small businesses or sole proprietorships. At the same time, ZarMoney can scale and adapt to suit larger companies. Compare it to Great Plains accounting software (a Microsoft accounting software option), or other SAP accounting software options on the market. We believe that on the list of accounting software products available currently, ZarMoney is the most adaptable to the needs of any business.
Try ZarMoney as Your Cloud Accounting Software Today
Accounting has a simple definition, but it has never been simple in practice. With accounting software such as ZarMoney, though, your business can manage its accounting requirements in a streamlined, collaborative, and all-around intuitive fashion. Give our software a try today!