Chicago CPA and Accounting Firm for Small-Medium Businesses, Estates and Individuals

What is General Accounting?



General accounting is a broad term which could mean many things depending on the company.  Below are three examples of accounting which are generally the same, but cover a very broad spectrum of accounting duties.



Bookkeeping



Bookkeeping is a term which means to keep a record of all of the financial transactions of a business.  This would include things such as payments from customers, payments to vendors or suppliers, payments for rent, utilities, payments to employees, etc.  Bookkeeping is very important for any company because financial records are the backbone of business to ensure that the company makes money.  



Payments from customers and payments to suppliers are often referred to as the accounts receivable and accounts payable departments, respectively.  Accounts receivable is in charge of making sure that all of the payments that are owed to the company come in a timely manner, often within set terms for each customer.  Accounts payable is in charge of making sure that suppliers of the product are paid within the terms that are given to the company.  Companies often combine these two departments into one, but larger companies may have it split into separate departments.



CPA



A CPA is a certified public accountant.  These are individuals who have taken all of the necessary exams to become licensed accountants.  Some CPAs open their own offices and work for the public.  Tax season (between January and April of each year) is especially busy for CPAs because many small business owners come to CPAs to help them complete their taxes for the previous year.



CPAs can also work in large corporations or government.  Every big business has teams of accountants on staff who are in charge of the day to day financial transactions.  CPAs who work for large businesses like this generally do not have their own practice that is open to the public as stated in the example above.





Financial Advisors



There are companies who hire general accounting professionals to help others manage their finances.  Many people are unaware of the amount of money they should be saving for their future, or how to even get started down the path of saving.  That is where financial advisors can step in with their professional expertise to take a look at bank statements, receipts, and all other financial transactions for these people seeking help.  



Financial advisors often give these people set plans to help them get on track to whatever their financial goals are.  Most of the time it is for saving to retire early, but sometimes it's just to get a budget in place to stick to for those who have spending issues.



These three examples above are not all encompassing for general accounting, but they are some of the most basic forms of it.  Accounting can be a daunting path to follow for some people because it is often considered very stressful to manage money not only for yourself but for others and for companies.  Accountants are very good at their jobs and have very high attention to detail because one small decimal mistake could make a huge difference.



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