Accounting communicates the financial condition and performance of a business to interested users, often referred to as stakeholders. Individuals adhere to a widely accepted set of rules, concepts, and principles. This helps them become effective in carrying out the accounting procedures and communicating the financial information of the business. These guidelines govern the application of accounting procedures. These guidelines govern the application of accounting procedures. People know this set of guidelines as Generally Accepted Accounting Principles, or GAAP.
Accounting is the process of producing financial records for an organization. Accountancy typically involves generating financial statements that express the economic resources under the control of management in monetary terms. It also involves selecting relevant information and representing it accurately. Practitioners apply the principles of accountancy in accounting, bookkeeping, and auditing.
Many tedious accounting practices have been simplified with the help of computer software. Enterprise resource planning (ERP) software provides a comprehensive, centralized, integrated source of information. Moreover, companies can use it to manage all major business processes, from purchasing to manufacturing to human resources. This software can replace up to 200 individual software programs that were previously used. Computer-integrated manufacturing enables the production of products without human intervention and can increase production by reducing errors in the manufacturing process.
Computers have reduced the cost of accumulating, storing, and reporting managerial accounting information and have made it possible to produce a more detailed account of all data entered into any given system. Computers have also transformed business-to-business interactions through e-commerce. Instead of dealing with multiple companies to purchase products, a business can buy products at a lower cost and eliminate third-party expenses that companies once incurred. Inter-organizational information systems enable suppliers and businesses to stay connected at all times. When a company is low on a product, the supplier will be notified and can fulfill an order immediately, eliminating the need for manual inventory management, document filling, and waiting for product deliveries.
