What is internal accounting? The main work of internal accounting
Internal accounting plays an important role, contributing to ensuring the business operations of the enterprise take place effectively. In the article below, 1C Vietnam will introduce in detail the concept, role and main work of this type of accounting.
1. What is internal accounting?
Internal accounting is a professional department responsible for collecting, processing and reporting financial and non-financial information within an organization or business. This information is used to support management and decision-making processes.
2. The work of internal accounting in businesses
Internal accounting takes care of all tasks related to economic and financial operations arising at the enterprise. Below is information describing specific internal accounting jobs, including:
- Prepare, check, and control the validity and legality of documents before circulating in the correct order.
- Accounting for accounting documents in accordance with legal and accounting regulations of the enterprise.
- Store all internal documents in a scientific, reasonable and safe manner for lookup and inspection when necessary.
- Control and coordinate work with other accountants in the department to ensure work is done effectively.
- Prepare weekly, monthly, quarterly or unexpected reports at the request of managers to provide financial information to support businesses in making business decisions.
In addition to the internal accounting tasks mentioned above, internal accounting staff also need to prepare and summarize a number of reports as follows:
content reports | Reporting purpose | Reporting frequency | Report object |
Fund report | Know the amount of revenue and expenditure per day, week, month, quarter,... | Daily/weekly/monthly/quarterly... | Manager or administrator |
Report debt collected and paid | Understand receivables and payables to plan cash flow, debt collection, debt payment,... | Regularly weekly, monthly or according to management requirements | Manager, administrator, customer or supplier |
Inventory report | Grasp inventory information to plan production, purchasing, sales,... | Regularly weekly and monthly | Manager, administrator |
Product cost report (For product manufacturing enterprises) | Know the factors that constitute product value to plan production, price products, control costs,... | Periodically or depending on management requirements | Manager or business administrator |
Completion progress report (For construction and construction enterprises) | Understand the progress and completion value of construction projects to have an implementation plan, control progress, cost,... | Weekly/monthly or depending on management requirements | Manager, business administrator or investor |
Report on transport output and transport costs (For transport businesses) | Grasp information about transport volume and costs to have a plan to negotiate rates with customers, control costs, improve transport efficiency,... | Periodically or according to management requirements | Managers, business administrators or customers |
3. Difference between internal accounting and tax accounting
Internal accounting and tax accounting are two important jobs in the accounting field. Understanding the difference between these two jobs will help businesses and organizations use accounting information effectively to support business operations and comply with the law. Below is a detailed comparison table of the different factors of the two types of accounting:
Element | Internal accounting | Tax accounting |
Target | Provide financial and non-financial information to management to support decision making. | Ensure compliance with tax laws and tax reporting to tax authorities. |
Time | Do it continuously. | Usually done once per year. |
Limit | Focus on the organization's financial and non-financial information. | Focus on tax calculation and reporting to tax authorities. |
Standard | Comply with the organization's internal accounting standards. | Comply with country or region-specific tax laws and regulations. |
4. Necessary knowledge and skills to become a good internal accountant
To complete the job well and advance in the career, internal accountants need to have the following knowledge:
- Professional knowledge: This is the most important and fundamental knowledge, including knowledge about finance, accounting, taxes, law, etc. Accountants need to master this knowledge to perform tasks. tasks such as recording, analyzing, synthesizing data, preparing financial reports,...
- Foreign language ability: In the context of international economic integration, foreign language ability is an important requirement for many professions. Foreign language skills help accountants communicate with foreign partners, access new sources of knowledge,...
- Information technology knowledge: Information technology is being widely applied in the field of accounting. Information technology knowledge helps accountants proficiently use accounting and office software to improve work efficiency.
In addition to professional knowledge, internal accountants also need soft skills to work effectively, including:
- Work planning: This is a skill that helps accountants work more organized, scientifically and effectively. Accountants need to plan daily, weekly, and monthly work to ensure completion on time and with good quality.
- Time management: This skill allows accountants to use time effectively, avoiding work procrastination. Accountants need to know how to allocate time appropriately for each task so as not to be overloaded.
- Communication and behavioral skills: This is a skill that helps accountants build good relationships with colleagues, superiors and customers. Accountants need to know how to communicate tactfully, politely and behave appropriately in all situations.
- Thinking skills: Possessing the ability to think logically and creatively will help accountants accurately analyze and evaluate the financial situation of the business, thereby providing appropriate solutions.
- Teamwork skills: Internal accountants need to be able to work in teams, share information and responsibilities with colleagues to coordinate effectively with other departments in the business.
- Skills to handle situations when they arise: Enterprise internal accountants need to be able to calmly and flexibly handle situations so as not to affect overall operations.
To summarize, internal accounting plays a role in ensuring the accuracy, safety and effectiveness of the accounting system in the enterprise. Therefore, companies need to focus on building and developing a strong internal accounting department to support business operations and improve management efficiency. To update useful information about business management, don't forget to follow other articles on 1C Vietnam's website.