Importance Of Effective Communication In Accounting

Importance of effective communication in accounting

Introduction.

Communication is a main tool for many disciplines in particular accounting since it allows to transfer information so that the economic situation in companies is analyzed and understands. Entities entrepreneurs and counters based on financial statements make decisions to bring the company to success.

In order for effective communication, it is necessary for the employer.The use of communication is given to the internal company through an accounting information system process which allows entrepreneurs to obtain detailed, structured and analyzed financial reports from the accountants of the company’s counters.

In addition, the accounting communication is given in the external environment of the company as part of what the State requires within the Law and Regulation of Income Tax, which is broadly declare taxes to the Ministry of Finance, also present theAccounting books to the State, the above allows states to know the situation of the entity.

Communication for a long time has been the way in which people transmit information in any space and moment. In accounting, communication is perceived as one of the main pillars to transmit the financial information that reflects the economic situation of an entity or company through financial statements.

In this article, reference will be made to the use of the company’s internal communication, that is, the process that must be carried out will be explained to transmit the information within a company or entity taking into account the language usedTo do this, the types of communication within accounting;and the theoretical elements of the accounting information system.

On the other hand, the use of communication to the external communication of the company will be demonstrated through the declaration of taxes and the presentation of the accounting books required by the Ministry of Finance and the Legislative Assembly through the articles set out in the Law andValue Tax Regulation. It is important to add that this communication is the way in which the State knows the situation of companies at the economic level.

Developing

According to Santos, communication is a ‘dynamic process, in which a source or issuer that sends a message through a channel or media to a potential receiver that, in turn, can also become a broadcaster’, can also participate in a sender ’.Communication is a difficult process to carry out because it is not only. It should be noted that for a communication to be effective it is necessary.

Types of communication in accounting

In accounting there are two types of communication: verbal, and individual communication. It should be noted that these types of communication must go hand in hand with effective communication, thus allowing employers to obtain the entity’s financial information in a clear and precise way.

According to Corbin, verbal communication is characterized by the use of words in the interaction between the issuer and the receiver. There are two types, because words or language can be expressed in a spoiled or written manner. Oral communication: It is done through oral signs or spoken words. The screams, crying or laughter are also oral communication. On the other hand, written communication is done through written codes. Hieroglyphs, alphabets or logos also belong to this type of communication . 

Verbal communication is presented through the financial reports that the accountant makes the company in the case of written communication;On the other hand, oral communication occurs when these reports are sent to entrepreneurs in board of directors where the counters explain in detail, the situation of the company determined is given if it is getting to success or not.

When carrying out verbal communication within a company, individual communication is used. According to Corbin, in this type of communication they only interact one issuer and a receiver, that is, that communication occurs from individual to individual. It is a framework of interactions characterized by privacy and the impossibility of pretending to impact an audience or a third person who observes ’. This communication is used by the interaction between the accountant and the employer when transmitting the financial information verbally.

Main communication factor in accounting: language

Starting from the concept of communication, and the type of communication in accounting, it is important to point out in the first instance the language used in accounting to communicate. Then the theoretical elements of basic information theory reflected in accounting will be announced.

In the first instance it is important to define that it is accounting, according to Urueña, accounting is the science and technique that teaches to collect, classify and register, in a systematic and structural way, the commercial operations carried out by a company in order toProduce reports that, analyzed or interpreted, allow planning, controlling and making decisions about the company’s activity.

The main objective of accounting is to provide systematic and structured information about the expenses and income of the entity through financial reports that allow to determine if the company is producing profits or losses in this way both the accountant and the entrepreneur may make strategic decisions eitherso that the company continues to grow or leave its “ economic crisis’ ”.

Financial reports represent the accounting cycle that every entity or company must carry out to determine the company’s situation. Therefore, it is important that both the accountant and the employer are aware of this language in this way with the results that the financial reports present on the situation of the company, both can use appropriate strategies to bring the company to success.

The basic elements of the communication theory reflected in accounting

This section exposes the communication reflected in accounting through the basic elements of communication, in this way it is reflected how communication between counters and entrepreneurs occurs.

• Information Sources: The accountant must assess what the necessary information that must be presented to entrepreneurs and by which means can obtain it.
• Issuer: It is the accountant who directs the communication of accounting in an entity by transmitting knowledge in a structured and organized way to the entity’s businessman.
• Message: It is known as the final product that the accountant must convey to entrepreneurs so that they have an idea of where the company is going, these products are known as financial reports.
• Channel: These are the means that the accountant must use to present their reports, in this case they are the accounting books which are evidence of the company’s situation is also the financial analysis that the accounting department executes to make a diagnosis of the entity.
• Receiver: They are entity entrepreneurs who receive information. At this point the communication process ends and it is checked if the information was understood. It is important that the information is clear, precise and relevant so that decision makers can understand and perform their job.

Information process model of the company

Within an organization or company, it is necessary to be adequate communication, which allows a transfer of ideas or information of operational or administrative activities among employees, this occurs through an information system.

According to James) a system is a set of components that interact with each other to achieve a common goal. Among the entities, information systems occur as a result of the execution of activities that have as its main objective transform the events into signals. The above allows to obtain an information acquisition process, which has a logical sequence, with food food, organization of the data extracted, and the generation of useful information for the determined purposes.

1. Planning: At this stage of the accounting information system, it is where the plans that the company possesses are presented.

two. Tickets: This stage consists of collecting the necessary data so that with this information the support documents can be prepared which will represent the accounting information of the company, that is, the accounting seats.

3. Process: At this stage the data is stored as part of the proof of accounting the above so that in the next stage they can be transformed.

4. Departures: At this stage the accounting vouchers stored in the previous stage are transformed to proceed to prepare the financial statements that will show both the accountants and the entrepreneurs the situation of the company.

5. Feedback: At this stage the financial reports submitted as part of the exits of the accounting system model are evaluated, for this we proceed to take into account 3 fundamental factors such as: internal control, decision making and a financial analysis.

It should be noted that the previous figure states that the system selects accounting data as main objects to proceed to a transformation process where these data become part of the financial reports of the company or entity. However, the most important thing is the feedback where the financial analysis of the entity will be developed resultingor not.

Accounting communication to the external environment of the company

Accounting communication is a process that must be given both internally and externally from the company. In the previous sections it was mentioned how the process was given internally. On the other hand, it is important to indicate that accounting communication to the external company occurs when taxes to the Ministry of Finance are declared and when the accounting books are presented to the State.

Declare taxes to the Ministry of Finance:

According to the law presented by the Legislative Assembly. Income Tax Law ”Taxpayers are all public or private companies that carry out lucrative activities or businesses in the country must pay the income tax”. The Legislative Assembly defines it as “Affidavit in which the taxpayer indicates results were the profits (less expenses) generated from its lucrative activity during the fiscal period, which normally goes from October one year until September of the following year‘ ’’.

In order for companies to pay the Income Tax, it is necessary that they carry financial reports in a timely, organized, systematic and analyzed way both entrepreneurs and the accountant will know the profits of the entity generated by operational activities which will allow them to takeThe best decisions for the company to grow. In addition to complying with what is stipulated by law.

Present the accounting books before the State:

In accordance with the provisions of the Legislative Assembly in article 53 of the Regulation of the Income Tax Law, it is understood that taxpayers must previously legalize the accounting records to carry out adequate control of their operations, between these legalized recordsThey are: the newspaper, greater inventories and balances. These must meet the requirements established in articles 251 to 271 of the Commercial Code ’.

In addition to carrying the accounting records, it is mandatory in accordance with the provisions of the Legislative Assembly in article 54 of the Regulation of the Income Tax Law, ‘conserve vouchers that support the seats consigned in the books and accounting records, as well ashow to keep them in due order, with identification of the accounting seat to which it refers and indicating the corresponding total that must coincide with the one registered in the books.

The above indicates that entities must carry the accounting reports up to date in accordance with the provisions of the Income Tax Law Regulations. With this, both income and expenses that the company have had will be verified. More than a matter of legal demand, it is a benefit that entrepreneurs obtain to know where their company is directed to increase or strengthen their economic success.

conclusion.

Accounting is the fundamental pillar of a company, therefore it is extremely important that the information provided by the General Accountant is clear and precise;In addition, the transmission of this information to the entrepreneur is efficiently allowing effective communication. Both accountants and entrepreneurs must have knowledge of the company’s financial reports with the main objective of knowing the economic situation of the same in order to make decisions that promote or strengthen the financial growth of the entity.

In order for entrepreneurs and counters to obtain this knowledge, it is important that the accounting information system model be carried out. And it is understood that accounting must go hand in hand with effective communication that allows the information provided by the employer for the entrepreneur to be understood in the best way.

Bibliographic references:

• Legislative Assembly (1988). Law No. 7092 of Income Tax.
• Legislative Assembly (1988). Regulation of the Income Tax Law.
• Castaño, c. AND. (2008). The strategic character of accounting in MSMEs: the Colombian context. 
• Corbin, j. (2017). The 28 types of communication and their characteristics. 
• Correa, j. A. (2005). From the double game to financial analysis. Accounting University of Antioquia, 46, 169­194.
• Scan, e. (2014). Accounting and communication. 
• Guajardo g. And Andrade, N. (2008). Financial Accounting. (5th.Ed.). Mexico, d.F. MAC Grawhill Inter -American.
• Núñez, e. (Fundapymes). 
• Ruíz, Yepes and Mejía (S.F). Strategies for the communicational function of the public accountant. Virtual Magazine of Public Accounting Students. University of Antioquia, Faculty of Economic Sciences. 
• Santos, v. (2012). Fundamentals of communication. Huñeros de Asís 96, Col. Loma Viveros, Tlalnepantla, C.P. 54080, State of Mexico. 
• Urueña or. (2010) . Basic accounting. Bogota Colombia.