ACCOUNTING USERS: TYPES AND EXAMPLES - DUDAS - 2024

The users of accounting are all persons or bodies, for different reasons, need to use the financial information of a company. Although management departments are important users of accounting information, they are not the only ones who require it.

There are other stakeholders, both inside and outside the company, who need to use this data in order to make important financial decisions. There are many reasons why accounting information is relevant to its users. Some use it to measure performance on assets, liabilities, income, and expenses.

Others use it to make the best financial decisions around investment, credit or operational aspects. The accounting data reflects the economic reality of the company and is presented in the financial statements. These are available to accounting users to meet their needs in this area.

However, accounting information is really useful only when it is interpreted through an accurate financial analysis, in which the data is evaluated considering all the factors that influence it. The results will allow decision-making in the different areas of the company.

Types

Accounting users can be divided into two large groups: internal users, associated with the so-called managerial accounting; and external users, related to financial accounting.

Internal users

Internal users are all those people who make up the company at each of its levels.

They usually have unlimited access to the company's accounting information, some of them being able to make economic decisions related to the management of the organization. This group is made up of:

Owners and shareholders

They are those who contributed the capital for the operation of the company.

Administrator

It is the person who is in charge of planning, organizing, directing and controlling the resources of an organization.

Workers

Made up of the group of people that make up the company's workforce.

Ext users

They are those who, without belonging to the company, use their financial statements for various purposes. Their access to accounting data is limited, and they cannot take part in any aspect related to the financial management of the organization. Among them are:

Creditors

They are those people or institutions to whom the company owes money, due to a service provided or for the acquisition of an asset.

Financial institutions

They are all those organizations that provide their clients with services in the financial field.

Investors

This includes both investors who are currently tied to the company and those who could potentially invest in it.

Financial advisors

They are in charge of conducting financial investigations of an organization, to issue a report on its financial and economic situation, while evaluating the management carried out.

Workers' unions

The group of workers is organized through a union that represents them before the management of the company. This union is in charge of looking after their interests inside and outside of it.

Media

They are the different channels that are used to transmit information to the public.

Providers

They are responsible for providing goods or services related to the branch of the company.

customers

They are all those people or companies that receive a service or a good in exchange for monetary compensation. Includes producers, wholesalers, retailers and final consumers.

Public administration

It is constituted by the set of organisms dedicated to the administration of the government in the affairs of State.

Competitors

It refers to companies that have a commercial rivalry within the market.

General public

It refers to all the people who, in one way or another, are related to the company.

Examples

Internal users

Owners and shareholders

It is through the financial analysis of the accounting data that the shareholders or owners of the company can obtain information on the profits obtained or the losses that the organization has had.

Administrator

To do his job, the manager takes accounting data to evaluate the performance and actual position of the business. This helps in determining costs, stipulating potential investments, and identifying potential economic red flags.

Workers

They are interested in knowing the financial details of the company, as these have a direct impact on their contractual remuneration and job security.

External users

Investors

They use accounting information to find out how the money they contributed or could contribute is being used, thus helping them make decisions about reducing, increasing or maintaining their investments.

Financial institutions

Financial data provides these agencies with the information to determine the creditworthiness of the organization. Based on this, it may establish the terms and conditions of the granting of future credits.

Public administration

These entities ensure that the information is governed in accordance with the accounting principles, rules and regulations that the government has established. In addition, they verify that the company makes the correct payment of the tax taxes that correspond to it.

customers

Customers use this data to assess the financial status of their suppliers, in order to ensure a constant flow of the product or its timely payment.

Providers

For suppliers it is important to evaluate the organization's repayment capacity, since any form of credit to be implemented will depend on it.

General public

The general public needs to have a global vision of the economy at the regional and national level. To obtain this information, it uses the financial information of the companies that are in its state or those that are most relevant at the national level.

Workers' unions

Unions review the financial conditions of the company before demanding increases in wages, benefits and other labor matters.

Creditors

Creditors use financial information to know the creditworthiness of the company and thus make decisions, either to extend the credit granted or to place restrictions on expenses to pay debts.

Financial advisors

They use the company's accounting data to evaluate it and use the results to advise their investment clients.

Media

These media use company accounts to disseminate relevant economic information, which influences public opinion at the national and international level.

Competitors

Many companies carry out financial analysis of the companies that make up the competition, in order to identify the weak and strong points of their rivals and take actions in different areas that allow them to better position themselves in the market.

References

1. Accounting-simplified.com (2017). Introduction to accounting. Taken from: accounting-simplified.com
2. Accounting capital (2018). Who are the Users of Accounting Information? Taken from: com.
3. John DuBois (2018). Primary Users of Accounting Information. Chron. Taken from: smallbusiness.chron.com.
4. Accountingverse (2018). Users of financial statements. Taken from: accountingverse.com.
5. Kaplan finance knowledge bank (2018). Users of financial statements. Taken from: kfknowledgebank.kaplan.co.uk.