The mechanical paper tape adding machines setting on corporate desks next to high priced personal computers are not normally thought of as an inordinate expense. In fact, it is my experience that those mechanical machines are considered by companies to be a necessity. Nothing, in my opinion, could be further from the truth on either count. Those antiquated, mechanical dinosaurs can actually be a very expensive and unnecessary addiction to which there is an inexpensive alternative.

Hypothesis

My hypothesis is that mechanical paper tape adding machines, or printing calculators, are no longer viable office equipment when they are sitting next to personal computers. Pencil and paper spreadsheets pretty much disappeared shortly after the advent of the personal computer. This migration of spreadsheets to software was seen as a very sensible move since electronic spreadsheets provided much more functionality in a very easy to use format.

A similar migration, in my opinion, is long overdue for mechanical paper tape adding machines. With the availability of feature rich adding machine programs like myOwn10-Key, it no longer makes sense to continue using the costly, feature deprived mechanical devices. The electronic adding machines, like electronic spreadsheets, offer much more functionality in a very easy to use format. Electronic tapes also contribute significantly to the bottom line when compared to antiquated printing calculators.

Analysis Factors

To test my hypothesis, I did an ROI analysis of converting to myOwn10-Key for United Parcel Service. Why choose Brown? Because the UPS web site displays very detailed technical information for the company. The number I needed was a count of personal computers in use at UPS. As of Sunday, August 5, 2007, the number of LAN Workstations in use at UPS was listed on their web site as 149,000. That was the starting point for my calculations.

Here are the other assumptions I needed to complete the analysis. I tried to be on the conservative side for all of these factors.

• Percent of personal computers with a printing calculator sitting beside it 30%.
• Price of paper rolls $8.48 / 12 pk.
• How often a new paper roll is installed on each printing calculator every 2 months (6 / yr).
• Price of printer cartridges $3.00 ea.
• How many printer cartridges are consumed on each printing calculator 1 / yr.
• Percent of printing calculators replaced per year 10%

The cost of purchasing mechanical paper tape adding machines for new employees is not considered in this analysis. Also not considered in the additional cost of the power required to operate the mechanical adding machines.

Annual Cost Of The Dinosaurs

For this analysis, I created an ROI analysis etape with myOwn10-Key. You can view the entire analysis etape in another browser window or tab by clicking on the View eTape link in the resource area at the end of this article. I encourage you to click on that link now so you can follow along on the etape.

The etape calculates the annual expense of maintaining an estimated population of mechanical adding machines first seen on line 4. As seen in the first part of the etape (lines 1 through 33), the annual expense of maintaining the printing calculators, is, in my opinion, revealed as something much more than trivial. On line 33 you can see that the annual price tag for keeping all those mechanical tape adding machines on desks next to personal computers is just under $550,000.

The next question is what would happen if those antiquated dinosaurs were replaced with a full featured adding machine program like myOwn10-Key? The remainder of the ROI analysis etape answers that question.

Cost Of Converting To myOwn10-Key

On lines 35 through 50 of the etape a quote is calculated for a site license for myOwn10-Key. I based this calculation on my 60-40 Plan which is available to large corporate customers. Under this plan, the price is based on 60% of the personal computer population being licensed. A 40% discount is applied. The site license is then issued for 100% of the PC population being considered.

For this analysis, Im assuming that UPS would want a site license only for those personal computers on which a companion mechanical adding machine is being replaced with myOwn10-Key. Company PCs that do not have a companion printing calculator are not included in the site license.

As seen on line 48 of the ROI etape, converting to electronic tapes with myOwn10-Key has a very attractive, one time price tag of just over $320,000. The ROI period works out to about 7 months. This analysis illustrates that the savings to be realized from converting to myOwn10-Key can be substantial. Remember, these numbers are based on conservative analysis factors. The actual savings could be much more. These annual amounts fall straight to the bottom line.

• Savings first year $226,093.
• Minimum savings each year thereafter $547,128.

In addition to these dollar savings, there are also environmental benefits. Not buying paper tape and ribbons in cardboard packaging means less pressure on our forests. And not throwing out broken machines and exhausted ribbon cartridges means fewer non-degradable plastics going into our landfills.

Do Your Own Analysis

These potentially large savings, plus the environmental benefits of converting from mechanical paper tape adding machines to myOwn10-Key are available to any large corporation. To find out what kind of savings your company can realize, download the myOwn10-Key ROI analysis etape (link provided below) and plug in your own values on the below tape lines. (The 60-40 Plan assumes a PC population of at least several hundred. There is a different discount schedule for smaller populations.)

• 2 Total PC Population
• 3 Percent of your PCs with printing calculators sitting beside them
• 7 Price you pay for each paper roll 12 pack
• 13 Average number of paper rolls consumed by each calculator each year
• 19 Average number of ribbon cartridges installed in each calculator each year
• 20 Price you pay for each printer cartridge
• 25 Estimate of the percent of your calculators that are replaced each year
• 26 Estimated cost you pay for new printing calculators

When any of the above values are changed on the etape, the entire etape is recalculated. The lines on the etape that are highlighted in blue and green (when the etape is opened in myOwn10-Key) are Master/Derived Values. These lines are linked such that updated subtotals cascade to following sections on the etape.

Conclusion

In my opinion, mechanical paper tape adding machines are a costly, outdated addiction. Migrating the adding machine functionality to electronic adding machine software, like myOwn10-Key, makes excellent business sense both from cost and environmental perspectives. I think its time the mechanical paper tape dinosaurs faded into the same sunset where pencil and paper spreadsheets disappeared almost 30 years ago.

George Gilbert

View eTape: myOwn10-Key ROI Analysis (60-40 Plan)
Web Page: myOwn10-Key

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Running a business is not a childs play. Moreover, managing small business bookkeeping is again a Herculean task. We all are very well aware of the fact that managing and maintaining financial records consume lots of time and personnel resources. Hence, there is one solution that can solve a problem of bookkeeping for small businesses. What is bookkeeping and how does it help in saving time and money? The answer to your query is that bookkeeping is a process that involves maintaining of records of the various transactions that have taken place throughout the year.

The functions of small business bookkeeping includes looking through the total revenue, profit, loss and expenses, dates of the transactions and various other minute financial details incurred by the company. This brings us to the conclusion that bookkeeping is one of the most vital aspects of a business irrespective of it size. In fact, small business bookkeeping needs to be maintained more accurately because once they know their financial status very well they can think of expanding themselves. Small business bookkeeping provides many advantages of maintaining financial records. It helps the owner or a manager to know the accurate financial status of the company business, small business book keeping also helps these small businesses to know their accurate financial position that further assists them to understand the profit and loss that the business is coming up with. It additionally helps these businesses to be financially and legally precise.

Small business bookkeeping consists of the details, such as the daily transactions, turnover, loss, if any and other such details as these details can help small businesses to get loans. Maintaining small business bookkeeping is also a huge task like maintaining a bookkeeping for any big business. Therefore, it is always very important to get professionals who are thorough with their work even if the work is being done for small business book keeping. So, hurry and call a small business bookkeeping executive to get your task done in no time. Hiring professionals to do bookkeeping helps the businesses to understand their financial position as it further helps it to grow and also keeps a good track of the bookkeeping of the business.

Small business bookkeeping should be done on a regular basis as it helps to maintain the financial records regularly. The executive provided by the small business bookkeeping will maintain the daily transactions as it helps to keep a track of the smallest of the financial expenses or gains. If there is a hindrance in the regularity then it might become a major issue resulting in losing the track of the small business bookkeeping causing loss to the company. It can be done either manually or with the help of computers. The basic purpose of the accountant or bookkeeping service is to maintain an accurate record for the company. This is usually done by maintaining a monthly spreadsheet of the expenses incurred daily and another to show the sales, purchase, gross, and net profit. Small business bookkeeping is of great help to a business and this has been proved repeatedly and it is isndeed, the best way to keep out of unwanted troubles.

Alvis Brazma gives advice to business owners about how to manage their business efficiently without any hassles. To know more about Accounting outsourcing services,Small business accounting,Retail accounting, Small Business Bookkeeping visit this leading internet source: http://www.impacctusa.com

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It is not new news that majority of people in and around America and rest of world has major issues managing their finances. Do you know: there are number of good and valuable tools that can be used to not only to manage your budget but also helps you to stick to them? Another fact that will open your eyes is about the highest credit card debt ever reported in America has touched $8500. With lots of surveys being conducted around America, figures have revealed that most people spend more than 10% of what they earn. Reason for this is the inability of an average person to manage their budget.

Do you know how important budgeting is in your life? Consider these valuable benefits: budgeting allows you to secure your finance in a proper manner securing your current and future and gives you peace of mind, not having to worry about how to repay the money. With the inclusion of the forecasting features, the budgeting software can show you an estimate of your finances in future. If your future is important to you then you should get used to budgeting before the time passes quickly and leaving you under debt.

Almost all good budgeting softwares are available on the internet which can be purchased and downloaded instantly. However, if you dont want to spend your money into any such budgeting softwares then search the internet for those which are available FREE of cost. Remember, budgeting softwares are not the ones like excel spreadsheets that you might be using on daily basis. Almost all the major budgeting softwares have a forecasting feature which revels the figures for any What happens if type questions. You can create various types/styles of reports and can analyze different situations and scenarios. Using such powerful tools can give great power in the hands of the CPAs as they could understand and build an immediate breakthrough reports on the information supplied by the clients.

If you are only looking for good forecasting software which could help you predict the future, then better go for a DecisionPro Forecasting Software and Qucikbooks Pro software which gives numerous great forecasting tools to help you do a feasibility check on your budgeting estimations. This tools helps you narrow down the report you would like to analyze instantly on your computer/laptop.

Major CPA agrees on the fact that developing a forecast or budget is very complex and time consuming job. There are new and improved technology based tools that can be used to make this process a real simple with the inclusion of traditional budgeting/forecasting concepts. You will not believe, there are still organizations around the world which are solely dependent upon Excel spreadsheets.

The best thing that has happened over years of economic change is the method of calculating the budget and forecasting. Allowing the accountants with such tools and techniques is now-a-days treated as meaningful yet demanding standards.

Natalie Aranda is a freelance writer. With the inclusion of the forecasting features, the budgeting software can show you an estimate of your finances in future. If your future is important to you then you should get used to budgeting before the time passes quickly and leaving you under debt. If you are only looking for good forecasting software which could help you predict the future, then better go for a DecisionPro Forecasting Software and Qucikbooks Pro software.

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As their trusted advisor, you need quick and easy access to their data. How do you get the information you need exactly when you need it? Answer: software application hosting.

Application hosting simply means that registered software, like QuickBooks, resides on a third party server, versus individual desktop or laptop machines. Having the software on a third-part server allows for easy access from any computer, at any time. This type of hosting helps business owners keep their accounting software and financial data in an ultra-secure environment where they have 24/7 access and the ability to easily work with their accountant or business advisor.

How does application hosting work? Typically an account sets up their business client files a data center where existing files are moved. The data center allows permitted users access to financial data regardless of location, through the Internet immediately. In addition, businesses can view their clients books in real time and view the same screens without additional software or fees.

Why should accountants consider application hosting? Just some of the are :

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Deciding to use an application hosting service can provide firms both a strong competitive advantage and operational efficiencies.

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BuPro USA is the leader in outsourcing services for accounting and tax professionals. BuPro USA is a U.S. and Indian based company that helps accounting and tax professionals become more efficient and manage their work more effectively. Their proprietary technology platform makes the outsourcing process easy to use for all accounting and tax professionals; no matter their size or business mix. Key benefits include: a lower stress work environment, better quality, lower costs and better end-client relations. BuPro USA is a privately held company based in Ferndale, MI. For additional information, please visit http://www.BuProUSA.com or contact us at: info@BuProUSA.com

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The very existence of an organization is determined by the profit and loss that the organization incurs. A known fact in the corporate world is that however big or small an organization is, one of the most important targets of that organization is to be able to manage the finances with suaveness and do all the calculations perfectly. The more the involvement of finances, the more becomes the responsibility of the professionals working in the accountancy department of the organization. With the constant rise in competition, every businessperson thrives to make his or her business one of the best businesses in their domain. This is not at all a wrong thought and it is this very thought that makes people working in an organization give their best shot in everything they do. The accounts department of any business, be it small, medium or large-size business, is considered to be one of the most efficient teams, and why not, they help to determine the future of the organization. However, at times it becomes difficult to handover all the work to the in-house department, which leads to many problems. However, taking the help of accounting outsourcing services from any accountancy firm that outsource services can prove to an advantageous and a profitable move.

In fact, we can say that accounting-outsourcing services can actually turn out to be one of the most dexterous ways of handling and managing the accounts of any given organization. Well, when you hire the services, you must be aware that there are some techniques and strategies that these firms follow and these strategies generally differ according to the nature of the business. However, there are certain basic strategies that these accounting outsourcing firms follow. These strategies include the maintenance and managing of the book records of any firm for a particular financial year and they make sure to include each transaction that has taken place in that financial year.

Moreover, a known fact is that accounting needs loads of patience and at the same time, the person has to be very careful while entering any financial data because one mistake can lead to many problems. However, if you take the help of accounting outsourcing services from any accounting firm, you will not have to worry about these factors, as these professionals know how to take care of all the aspects. In fact, any firm that provides accounting outsourcing services has n numbers of accounting professionals who are thorough with their work and can execute their work at the command of their fingertips. Therefore, there is nothing you will have to worry when you hire the service.

However, you too will have to give some inputs like explain the professional the nature of your business and give him or her detailed accounting record of your firm. Once these are done, you can be rest assured to get the best accounting outsourcing services. However, you must a constant eye on the person and make sure that he updates you about all the work that he is doing. This will also help you.

Michelle Barkley is a CPA who advises people on tax preparation and tax calculation.She specializes in bookkeeping outsourcing, Tax return preparation,back office outsourcing and Outsourced Accounting.To know more about Accounting outsourcing, Accounting outsourcing services and to use the services visit http://www.ifrworld.com.

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In 2006, two out of three chiropractors increased billings (67%), while almost ninety percent (88.3%) of chiropractors sold retail products to patients. At an average $28.5 collections per patient visit (PVA), retail product sales to patients remains a major revenue source. But for junior practitioners with a humble patient growth record, point of service sales is the fastest way to increase practice revenue.

An added benefit of such sales is improved patient relationship. By offering your patients quality products that enrich their lives outside of your office, you demonstrate your care. Your patients are reminded of you and of your care about them every time they use the products you sell them. Better patient loyalty means lower attrition, frequent referrals and, eventually, improved profits.

Stick to familiar products. Offer products you use during your treatments. Offer items like topical analgesics, hot and cold packs, orthopedic pillows and supports, water-based pillows, herbal packs, massage tools, lotions, oils, butters, scrubs, aromatherapy, etc., which can be used in your office to benefit your patients daily.

Maintain exclusivity. Choose products not available in retail stores. Patients feel special if you offer products they can not find in mass retail markets.

Display. Set up retail displays in both waiting room area and the treatment room. Make sure the patients can feel, touch, sample, read about the benefits of the products, and ask you questions, giving you an opportunity to talk about their benefits.

Manage accounting. Best billing systems manage both healthcare claims and point of service sales records uniformly, without imposing extra complexities on practice management. The challenge is to process healthcare claims with insurance companies while leaving point of sales records aside and still produce correct sales and balance reports for each patient.

Yuval Lirov, PhD, author of “Practicing Profitability - Network Effect for Revenue Cycle Control in Healthcare Clinic and Chiropractic Office: Scheduling, SOAP Notes, Care Plans, Coding, Billing, Collections, and Audit Risk” (Affinity Billing) and “Mission Critical Systems Management” (Prentice Hall), inventor of patents in Artificial Intelligence and Computer Security, and CEO of Vericle.net - Distributed Billing and Practice Management Technologies. Yuval invites you to register to the next webinar on audit risk at BillingPrecision.com.

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You have either started a new business, decided to get your financial information in order for your existing business or your tax preparer has announced that he/she wont do your tax return anymore if you bring in one more years receipts in a shoebox or plastic bag. So on the recommendation of friends, business associates, accountant, or other professional in the know you have purchased QuickBooks. And if you are like most people you have installed it on your computer with great expectations. But you dont have a clue about bookkeeping and so getting started is not so easy. What are items you ask. I am already part through my year when and how do I start my beginning balances? Do I need inventory? So many questions and so little time.

New owners of QuickBooks usually take one of several paths. The most common I have seen is to use only the checkbook and invoicing features of the program, never diving deeper into the tools that QuickBooks offers the business owner. However, the smart business owner knows they will be better off in the long run to hire a Certified QuickBooks ProAdvisor right in the beginning to set up their books using the tools QuickBooks provides to the companys advantage.

A QuickBooks Certified ProAdvisor can set up your Chart of Accounts in a way that will allow you to get meaningful financial reports and can also design and save templates (memorized reports) so that these custom reports can be pulled up by you with just a click of your mouse.

Also having your items set up properly by a Certified QuickBooks ProAdvisor (inventory, service, discounts and other types of items) will allow you fill in forms such as invoices, purchases orders, sales receipts and others, quickly and with less key strokes.

And if a QuickBooks ProAdvisor is also an experienced bookkeeper you will also get professional advice on entering your everyday data in a correct and efficient manner thereby assuring your books and reports have correct information and your tax preparer or accountant are not struggling to fix your books at year end which will surely save you some money.

And even if your company has an in-house bookkeeper who has used QuickBooks, they have not had the extensive training and experience a Certified QuickBooks ProAdvisor will have with the family of QuickBooks products. Retraining and updating your bookkeepers knowledge of QuickBooks will enhance their productivity and efficiency.

As with anything, doing things right the first time saves time and money not to mention frustration. Just a few hours with a Certified QuickBooks ProAdvisor will save you hours of work, and give you financial reports that will help you keep on top of your companys needs and growth and save money as well.

Copyright all rights reserved Bookkeeping R Us 2006

Donna MacMillan, certified QuickBooks consultant and president/founder of MacMillan Associates provides a unique set of services covering all aspects of successful business growth and financial health for all business types and sizes. Offering comprehensive, confidential, and professional services, MacMillan Associates can analyze, design or redesign your current systems to maximize productivity, cash flow and solidify your bottom line.

Bookkeepers R Us is dedicated to honoring the profession of bookkeepers with current news and resources for bookkeepers and businesses. Our articles discuss the everyday details of running a business, career/education opportunities, workplace ethics/behavior, software choices and many other subjects to help you increase your value in the workplace and the value of your business.

Visit us today to read free articles that will update your skills and knowledge and increase your worth within the business world!

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Small businesses have to be careful when it comes to their finances because one small error, like ordering too much inventory, could spell financial disaster. Thats why budgeting and forecasting tips for the small business are incredibly important for the small business owner. Knowing how much money can be spent and on what is the most important thing for a small business to stay afloat. Two things that can help small businesses with this include forecasting software and budgeting software. Installing this information on your computer will allow you to keep track of the businesss past, present, and future and forecast different trends not to mention manage the budget. The following information will show you just how important budgeting and forecasting are for small businesses.

First of all, any time the business needs a loan a budget will be required before any financing is offered. The reason this is important is because lenders want to see where money is spent and overall where money is being made. Also, when you use a budget you will always know how much you can spend, what risks you can take, and how your business is doing at a particular time. When you create a budget for your business you will need to sit down with last months bills to include them in the expense portion of your report. You dont want to just throw out random numbers. Instead, you want to know for sure the number you are using are ones that correspond to your business. In your budget you will also want to include expectations, or a forecast, of your business growth. If you dont know how to do this on your own then the forecasting software will really help you. Make sure you include the individuals in your business who know the information you are looking for. Sales managers, accountants, and the like can offer you information on your business growth that you can include in your budget.

Once you have your budget created you will need to review it to make sure that what you have makes sense. Also, while creating your budget you need to decide if you will be creating a monthly budget or even a yearly budget. The more information you have the better off you will be. Plus, the budgeting software will make this really easy for you as long as you have all the necessary information to plug in. When your budget and forecasts are completed you can have a good look at the situation your company is in and if things go as planned how the company will be in the forecasted time period.

Natalie Aranda writes about business. Small businesses have to be careful when it comes to their finances because one small error, like ordering too much inventory, could spell financial disaster. Two things that can help small businesses with this include forecasting software and budgeting software. Plus, the budgeting software will make this really easy for you as long as you have all the necessary information to plug in.

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With the advancement in the technology, one can notice that it has catered to many peoples business needs and lives in different ways. Link Building is one of the important aspects of an online business. Your business will work with a high speed if you adopt such techniques and methods that can make your business boom. There are two types of link building one is one way link building and other is two way link building or reciprocal link building. One way link building is a link to your site and in return no link is exchanged. This is done due to the reason that your site is very important for you and so its contents. Your contents are important data for your visitors and in this way you are keep a safe hands on the security of your data.

Link building is an important business strategy that can make any business zoom within a short period of time. In one way link building you can receive an inbound link for your website but you need not to give a reciprocal page to your link partner. Link building and link popularity is very crucial for search engine optimization as it makes a website popular among the online users. You want to put up quality links in your website and this definitely will earn a good ranking in search engines your website. This is an effective marketing tool for any website to promote their products and services through links. If your website gets an increase in the number of high-quality links then the result is that you get an improvement in your ranking in search engine.

This is the main aspect of your because your site is very important for you and all the contents are very useful for visitors or readers. Your online business will soar high and you will come make big money from your business. Links helps in recommending about your business or service to the users that comes to your site for some purpose. In this the links helps in the popularity of the business. One way link building contains the url of your site that is meant to make your extremely familiar among the users. Link building process can be done through various means and some are reciprocal links, regular links, newsletters, directories, search engines etc. Infact, it is a search engine optimization technique that makes website owner to build relevant and quality inbound links for their website. It is the responsibility of the owner to keep a watch on the quality and quantity of the link.

One way link building is the main strategy that the websites opt for after submitting their site details to search engines. This marketing technique plays a role in popularizing a website on the world wide web. It happens that numerous websites are linking to your website and then you get lots of traffic on your website. Thus, more traffic to your site will bring more money for you and business will also expand. Links are the key aspects of a business and it is the base of a business.

Allies Harbor is a writer and writes articles on various topics including outsourcing. To know more about Outsourcing SEO Services,Article syndication,Software Outsourcing India,Outsourcing SEO,Data entry services,India Outsourcing SEO,Data Entry Outsourcing,India Outsourcing Accounting, One Way Link Building visit http://www.ifrstaffing.com

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Accounting is defined as “the art of recording, classifying and summarizing in terms of money transactions and events of financial character and interpreting the results thereof.” In simplest words, we can say:

(1) Accounting is an art

(2) of recording classifying and summarizing

(3) in terms of money

(4) transactions and events of financial nature and

(5) interpreting the results thereof

Accounting is an art of correctly recording the day to day business transactions: It is a science of keeping the business records in a regular and most systematic manner so as to know the business results with minimum trouble. Therefore, it is said to be a statistical procedure for the collection, classification and summarization of financial information.

Objectives of Accounting

The objectives of accounting are two-fold:

(1) To record permanently, all business transactions, and

(2) To show the effect of each transaction and also the combined effect of all such transactions for a given period so as to find out the profit the business has earned or loss incurred, and also to know the correct financial position on a particular date.

The necessity and importance of accounting can be understood by answering the following questions:

(1) How much we have earned this year ?

(2) How much was earned during the last year ?

(3) Is our business improving?

(4) How much cash do we have?

(5) How much money we owe?

(6) How much others owe to us ?

Accounting Systems

There are various systems of accounting for maintaining business records:

Cash system of accounting

This system records only cash receipts and payments on the assumption that there are no credit transactions. If at all there are any credit transactions, they are not at all recorded until the cash is actually paid or received. Receipts and payments account in case of clubs, societies, hospital, educational institutes, lawyers etc. is the best example of cash system.

Single Entry System

This system ignores the two fold aspect of each transaction as considered in double entry system. Under single entry system, merely personal aspects of transaction i.e. personal accounts are recorded. This method takes no note of the impersonal aspects of the transactions other than cash. It offers no check on the accuracy of the posting and no safeguard against fraud because it does not provide any check over the recording of cash transactions. Therefore, it is called as “imperfect accounting.”

Double Entry System

The double entry system was first evolved by Luca Pacioliin, who was a Franciscan Monk of Italy. With the passage of time, the system has gone through lot of developmental stages. It is the only method fulfilling all the objectives of systematic accounting. It recognizes the two fold aspect of every business transaction.

These questions are of decisive importance for a trader and the answers can only be derived from up to-date financial records. Only the system of keeping the perfect records of all business transactions will help the proprietor to know the amount he has gained or lost.

The main objective of any business is to earn maximum possible profits with minimum expense. In view of this, a commercial organization always tries to expand its business, increase its sales and reduce operating expenses. The progress made in this regard, is always indicated only by the properly maintained financial records.

Meaning of Accounting

In the beginning, the main objective of accounting was to ascertain the result of the business activities (whether profit has been earned or loss has been suffered) during a year and to show the financial position of the business as on a particular date. Accounting has to meet the requirements of taxation authorities; investors, government regulations; management and owners. This has resulted in widening the scope of accounting and may be defined as follows:

“Accounting is the art of recording, classifying and summarizing, in a significant manner and in terms of money transactions and events which are in part at least, of a financial character and interpreting the result thereof.”

Is Accounting a Science or an Art?

In simple words, science establishes relationship of cause and effect whereas the art is the application of knowledge comprising of some accepted theories, principles and rules. Since accounting docs not establish cause and effect relationship it only provides us with the procedure by which objectives of accounting can be achieved, therefore accounting is an art and not a science. Accounting is an art of recording financial transactions in a set of books; classifying in desired categories and summarizing the information for presentation in a suitable manner to the concerned persons for their benefit.

Scope of Accounting

The need of a system of accounting was felt by man early in the history of trade and commerce. The art of book-keeping is as old as the art of trading itself. This art of keeping records passed through many phases since its inception. With the development of commerce, it has attained a position of great importance. Indeed, it can be truly said that accounting has become the foundation on which the whole fabric of modem commerce rests.

Though there is no legal obligation on an ordinary trader to keep the records, every business house finds it essential and convenient to keep the systematic records so as to know where exactly it stands. Moreover, it is legally binding on some forms of business, such as joint stock companies, to prepare periodically, statements in proper forms showing the position of the business. A proper and satisfactory method of accounting is an essential part of any business house for the following reasons :

(1) If no records are kept, it will be difficult to find out accurate net profit. Under such circumstances, tax authorities may overestimate the profits and thus a trader will suffer for not having kept the business records.

(2) In absence of proper business records, the trader will find it difficult to submit the true position to the court in case he becomes insolvent.

(3) Keeping of proper records helps the trader in framing future business plans & policies.

(4) It will be difficult to ascertain and fix the price of business to be sold or disposed off, if no records are kept.

(5) Finally, in spite of the best memory it is beyond the capacity of a trader to remember all the business dealings with back references.

The author is an engineering graduate, B.E.(Hons), and is managing his own software development firm, HiTech Computer Services, that mainly deals in accounting, billing and inventory control software for traders, industries, business houses, hotels, hospitals, medical stores, newspapers, magazines, petrol pumps, automobile dealers, commodity brokers and other business segments, website and web application development for business. The software are available both for intranet and internet. These software are available for download from the website:

Evaluation version download is available at hitech-on-web.com
Copy of the article and full Financial Accounting Primer or Tutorial is available at hitech-on-web.com

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