Keeping accounts is mandatory and provided for by law, but accounting information must also circulate both within the company and outside it.
1. Internal information
has. For leaders
Cost accounting aims to calculate the cost price of a product manufactured by a company.
The financial analysis makes it possible, for its part, to establish, thanks to the intermediate management balances, the functional balance sheet, and the study of the ratios, an analysis of the profitability of a company. This information will be necessary for business leaders to make strategic decisions.
b. For employees
The works council has been set up in companies with at least 50 employees. Since the law of May 15, 2001, he has actively participated in general meetings of shareholders.
The works council also has a right to information on the annual accounts of companies and can consult a chartered accountant. Employees are therefore kept informed of the financial situation of their company.
You may visit here to hire a Bookkeeper bookkeeper in Toronto
2. External information
has. For owners
Each year, the auditor certifies that the company's annual accounts are regular and sincere and that they give a faithful image of the result of operations for the past financial year as well as of the financial situation and assets of the company at the end of the exercise. The annual accounts thus certified are then made available to the shareholders.
b. For partners
A business may decide to borrow money from credit institutions in order to grow. The latter is entitled to demand from this company the communication of the annual accounts: balance sheet, income statement, and appendix before taking the decision of this financing. Indeed, banks want to know the risk they incur before concluding this type of contract.
vs. For administration
Companies use accounting to determine the amount of certain taxes due to the tax authorities.
The result, which appears on the profit and loss account, makes it possible to determine the taxable result which will be subject to the corporation tax that companies must pay.
Salaries can be used as a basis for calculating social contributions due to Urssaf (Union for the recovery of social security contributions and family allowances), Ascetic(Association for employment in industry and commerce), and pension funds as well as participation in the construction effort, the apprenticeship tax, and continuing vocational training.
Tax audits can therefore take place in all companies in order to verify the accuracy of the figures provided. Adjustments may be made in the event of errors found in the accounts of the companies.
The essential
Accounting information, therefore, circulates within the company since the owners and employees can have access to this information. It also circulates outside the company since the owners of the company, its partners, and the administrations can also become aware of it either through controls or reports.
