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Last Updated on July 3, 2024 by Team Experts
The truth is, we perform accounting tasks every other day, if not every day. Some of these take place even without you putting too much thought into it. That is why Integrating an erp application for accounting into your process is beneficial as it will help to do the task easily and It also helps in all business management functions including planning, inventory/materials management, engineering, order processing, manufacturing, accounting and finance, human resources etc.
Here are five examples of how we use accounting every day, making it among the most applicable courses in real life.
1. Account Reconciliation
Think about the last time you looked at your account statement. Chances are you were looking at it to see the balance Vis a Vis spending and bank charges.
At times, you will look at the cash in your wallet and tally up what you have spent money on during the day.
In accounting circles, this is called reconciliation. Essentially, it helps you stay on top of your finances.
If you were to take up accounting courses, you would be better placed to run your finances. The course itself should not worry you as you would get help whenever you needed it.
2. Budgeting and Spending Your Money
Planning personal finances begin with a budget. This tells you how much money you have so you can allocate it.
If you spend more than you earn, you are digging yourself into a financial hole. Budgeting ensures you spend what you have and not a shilling more.
If you find that your budget exceeds your income, you can start thinking about increasing your income or cutting down spending. Personal tax accountants do the same every day for businesses and corporations. They handle budgeting and institute cost-cutting measures when necessary.
3. Fore-Planning
Throughout your life, income will change, expenses will increase, and so on.
When the economy is unstable, assessing the future becomes all the more critical. Similarly, a common goal is for people to make enough money or have enough investments to retire early.
All these are things you think about every day and even plan for; this also includes taking a kid to college, buying a new car, starting a business, and going back to school.
It becomes imperative to do a financial analysis and begin laying the groundwork to make these things happen. All these aspects of investing, saving, debt management, and so on are deeply rooted in accounting.
4. Debt Management
Most people will acquire some debt at some point in life. For some, this will be student loans.
For others, it will be car loans, payday loans, mortgages, business loans, and so on.
Whichever form of credit you pick up along the way, accounting skills will come in handy.
First off, you need to find the cheapest credit facility available; this means tallying costs, interest rates vs. payment duration, and so on. You also need to figure out how much debt you can comfortably afford to repay and which repayment duration would work best with your income.
All these calculations are accounting-based.
5. Taxes
Filing and paying one’s taxes is a federal requirement. This is something every adult needs to do every tax cycle.
Failure to do this, and you can find yourself with an enormous tax lien or even legal trouble. Every time you file receipts to use when filing your returns, eventually, you are doing something accounting professionals do for their clients and employers from time to time.
This is not something most people will think about, but it calls for some accounting knowledge and practices.
Also read about: Excellent Tips To Help You Make Money Online
