…But wait… isn’t that like grading yourself or grading your own company? You can read more about this in Management Responsibility. The management holds primary responsibility for the published financial statements ensuring that they are not misleading, does not contain fraud and irregularities, etc. In general, management is responsible for the preparation of the financial statements. Who is responsible for financial reporting? Who is Responsible for Financial Reporting? Overall, US GAAP is required for US firms.
Putting up a business requires you to follow certain country policies, procedures, etc. What are the Financial Reporting Requirements? As such, a business needs to keep track of the business transactions that happen. In order for a business to understand its performance in context of that goal, it needs to have realistic data to analyze. The goal of the business is to ultimately earn profit from the services they provide and/or products they sell. …Okay, so why do we have to record or keep track of the financial transactions of a business?Ī business exists because at the end of the day it provides some service or product to its customers in exchange for money. This notebook must keep track and should contain the financial transactions of the business. My personal take is that you can also think of accounting as a huge notebook (with guidelines or rules) filled with the financial transactions of a business.
I plan to write more on basic accounting through a series of posts so you can expect more of this topic in the future. This is me trying to avoid information overload. Instead, it will focus on some of the important parts such as an introduction to accounting and the financial statements. This post will not serve as that basic accounting course rolled up into one blog post.
It may not work for everyone, but I am sharing this insight in case you feel it is worth a try – even if it is through free courses, YouTube videos, free learning materials, etc. If you think this approach will help you then I highly encourage you to try it. At the end of the day, this approach helped me associate the basics to the overall functionality and use of SAP in terms of finance. I personally decided to pursue the online course on top of the SAP resources provided by the company I was working in because I felt that I needed more accounting knowledge.Īt the time I thought “Hey, it could serve as a refresher (maybe) or even a huge chunk of valuable information”. If you read my previous post on 10 BIG Tips for SAP FICO Consultants – Career Journey (First Few Months), I mentioned that I took up an online accounting course to further aid my understanding on the topic. This in turn will give you a backbone of understanding the purpose of SAP Finance functionalities, behaviors, configurations, and more.
The basic concepts should help you link basic accounting to financial accounting in SAP.
When it comes to understanding how Financial Accounting works in SAP, it helps to take a step back from the ERP software and digest (at least) the basic accounting concepts first.