ACCOUNTING IN DAILY LIFE

What do you think when you hear the word “Accounting”? Of course, it is something related to
finance. Everyone may be familiar with accounting terms. However, not all understand the
meaning and application of accounting in daily life. Interestingly, we often carry out activities in
our daily lives related to accounting whether we realize it or not. For example, when we receive
a receipt after making a transaction, it is considered as an activity of receiving accounting
information.
Accounting is the process of gathering, recording, summarizing, and analyzing financial
transactions or data. It can be used in our daily lives because it maintains and expands the
financial health of a business. Accounting plays an important role in running a business
because it helps you track financial income and expenditures, management, and ensure
statutory compliance which can be used in making business decisions. Therefore, accounting is
a career that uses skills that are often used for daily activities too. It is true that until now
accountants are in high demand in business or a company because it is essential in part of the
business. 

The application of accounting is indeed more synonymous with businesses. However,

accounting for personal finance is very important too. The goal is to organize or record our
finances so that they remain stable or can be said to be healthy. Unconsciously, people already
use accounting in their daily life, for example, first for budgeting and managing your spending.
We can know where and how the money we have is used. In addition, we can also record where
and how much income we are getting for our finances. Then how can we apply accounting in
everyday life, especially to manage our finances? We can start by making a journal for our
financial records. Journals will record what our expenses are in a month, starting from the
smallest expenses to the largest expenses. We can also record our income each month, so that
at the end of the month we can find out how much expenses was occurs in this month and we
can plan our spending for the next month. This can be a way to make our finances more
effective and efficient.
Furthermore, we can make financial reports in the form of cash flows. For example, such as
money for savings, spending money, money earmarked for a certain thing to an emergency
fund. We can make it with a simple concept so that we can understand it ourselves. By making
records properly, we can evaluate our finances. For example, reducing expenses that are
considered less effective and efficient. The application of accounting makes it easier for us to
plan finances in the next period so that we can have healthy finances. Our financial condition is
arguably uncertain especially during the pandemic, so we have to spend money more efficiently
based on our needs.
Secondly, accounting can be used for planning for the future. Accountants or auditors tend to
look at their historical financial information to predict their current or future business. The
financial report includes a balance sheet, income statement, statement of a change in equity,
and cash flow. By looking at the historical financial information, the auditors can predict and
present the financial report of an organization. Also, they can know what were the difficulties in
the transactions. Therefore, having recognized the difficulties, auditors can solve those
difficulties. 
Thirdly, accounting can be used in business areas. If we have a business, you must implement
that accounting knowledge in your life. For instance, if your current business is an online store,
you must record every transaction to control the finances or money. Moreover, for every
business that you do, you need accounting knowledge to gain profit and run your business well.
As a result, accounting has a great advantage in our daily life. The advantage that you get is you
can know the income and expenses from our money by monitoring, controlling, and planning
the finances. By implementing this accounting activity every day, it will greatly help to control
your finances for a better result.