Financial Accounting  Manufacturers, Traders, Suppliers

Administrative accounting is a specialised are of accountancy and a fiscal recording obligation.

In contrast to industrial bookkeeping it is mainly concerned with the administrative bookkeeping of the business obligations to debtors, creditors and external investors and comprises the account maintenance, finanical statement, statement of earnings and the current account (running account). It determines the expected financial success of the company and is considered in the preparation of the final balance.

The accountancy, paperwork and tools of the administrative accounting includes the planned chronological recording (booking) of all business transactions, the value of stock and flow value of a business entity (company, enterprise). It applies the principle of documentation, whereby every entry is followed by a document, that serves as a support and proof for the validity of the transaction.

Private persons, freelancers and plants with a narrow market often apply a simple system of accountancy, whereby the amounts are entered under one another in table form. Such entries comprise of a date and type of transaction as well as total amount. Bigger companies however work with the system of double-entry bookkeeping, whereby every transaction holds a double effect on the financial status or the operating results or on both.

On the balance sheet the economic situation of the company is then represented, as information about the operating results is listed in a report on the income recorded in the profit and loss account. Business data with regard to the liquidity and changes in financial flows are shown in the cash flow statement. Following this is a balance sheet analysis.