business and accounting practices

Accounting practice is the system of procedures and controls that accounting professionals use to create and record business transactions.

Accounting practice should ideally be extremely consistent.  There are a large number of business transactions that must be dealt with in exactly the same manner in order to produce consistently reliable financial statements.

On the other hand Business management  is managing the coordination and organization of business activities. This typically includes the production of materials, money, and machines, and involves both innovation and marketing. Management is in charge of planning, directing, and controlling the business’s resources so they can meet the objectives of the set policy.

Business management usually focuses on the organizing, planning, and analysis of business activities that are required to efficiently manage and run a business.

Table of Contents

What is Accounting Practice?

Accounting practices are systematic procedures and controls that are used by an entity’s accounting department to control the accounting records and entries on the basis of accounting records. Other reports and financial statements like fund flow statements, cash flow statements, tax workings, payroll, payment, and receipt statements, etc. are also produced by following standard accounting practices.

Why Strict Accounting Practices Matter?

Accounting practices exist as a daily recording of accounting and financial data. It controls recording and access to the accounting record. Accounting is a significant part of any organization and it should not be manipulated and misused by others. There should be proper practices by every organization as it is a basis for many external and internal decisions and reporting.

Accounting is a systematic set of procedures imposed by professionals to properly manage the accounting records of a business for consistency and reliability. It is a transparent view of the accounts and transactions of the company.

In addition to the standard accounting practices, there are various other controls in place for the maintenance of accounting records for e.g., authorization controls like bills to be signed by an authorized person or entry barring in storekeeping/inventory room, or data access restriction to lower and middle-level employees.

Accounting practice not just involves recording and access control but it is important that accounts recording is conducted as per law and generally accepted accounting principles.

Accounting practices:

  • Record bills of purchases, sales, etc.

  • Maintain fixed assets register

  • Record of payments to creditors and receipts from debtors.

  • Manual calculation of depreciation.

Types of Accounting Practices

There are different types of accounting practices.

  • Private
  • Public
  • Government
  • Financial
  • Forensic
  • Management

Business Management Practices

Unlike accounting, there are no set rules or principles to follow in business management. Therefore, business management practices can be very different for different businesses based on their unique structure and needs.

Although there are no universally accepted principles for business management, still businesses need to consider some key aspects when it comes to effective management. Things like leadership, actionable business goals and policies, HR management, technology adoption, and financial management, all play critical roles in managing businesses.

With a variety of business management approaches and principles advocated by successful business professionals and academics, it gets very hard for practicing business managers to find the right set of protocols in achieving their business goals. Some of the very common challenges of business management are listed below.

Challenges of Business Management

These are the most prevalent challenges of business management.

  • Financial management
  • Regulation and compliance
  • Competences and recruiting the right talent
  • Customer services
  • Technology
  • Growth projections
  • Monitoring performance

Types of Business Management

Following are the most common types of business management widely in practice.

  • Financial management
  • Marketing management
  • Production management
  • Human resource management
  • Strategic management
  • Sales management
  • Program and project management

Take away

Good Accounting practices make sure that your business has sound financial management in place. Correct and transparent accounting also enables businesses to avert any future legal ramifications. A proper accounting management  system is also indicative of good business management practices.

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