What is the "End" in Bookkeeping and Accounting?

What is the "End" in Bookkeeping and Accounting?

Stephen Covey’s, author of The 7 Habits of Highly Effective People, second habit is Begin with the End in Mind.

"To begin with the end in mind means to start with a clear understanding of your destination. It means to know where you’re going so that you better understand where you are now and so that the steps you take are always in the right direction."

Every bookkeeper or accountant should remember this when performing their role in the accounting cycle.

Accounting the Language of Business
‍Accounting provides financial information about a business, nonprofit organization, or government agency. Owners, managers, investors, and other interested parties need financial information to make decisions. Because accounting communicates financial information, accounting is called the “language of business”.

Owners, managers, investors, and other interested parties need financial information to evaluate the entity’s performance and make decisions about the future. An accounting system allows owners, managers, and investors to obtain a range of useful information. The need for timely, relevant, and reliable financial information is why these entities have an accounting system directed by skilled bookkeeping and accounting professionals.

Accounting is the process by which financial information is recorded, classified, summarized, interpreted, and communicated to owners, managers, investors, and other interested parties. A designed accounting system is used to accumulate data about an entity’s financial affairs, classify the data in a meaningful way, and summarize it in financial statements. Owners and managers use that information to make business decisions.

Bookkeepers need to understand how important their role is in generating financial information. Bookkeeping is the foundation of accounting.

Accountants should ensure their bookkeepers are well trained and supervised. Well trained and supervised bookkeepers make the accountants’ role easier and more effective.