FinTech Glossary

What is Accounting?

Accounting is the systematic process of recording, classifying, summarizing, and reporting a business’s financial transactions to provide accurate information for decision-making, compliance, and financial control.

Business Context

For companies in India, accounting ensures accurate tracking of revenue, expenses, assets, liabilities, and taxes in compliance with standards such as Ind AS, Companies Act, and Income Tax Act.

It forms the financial foundation for budgeting, audits, funding, vendor management, and regulatory reporting.

Key Functions of Accounting

• Recording - Capturing day-to-day financial activities such as payments, receipts, vendor invoices, reimbursements, and card transactions.
• Classification - Organising entries into ledgers such as assets, liabilities, expenses, income, or equity for accurate analysis.
• Summarisation - Preparing financial statements like the Profit and Loss Statement, Balance Sheet, and Cash Flow Statement.
• Reporting - Presenting financial information to management, auditors, lenders, investors, and regulators.
• Reconciliation - Ensuring internal books match external records including bank statements, corporate card data, UPI transactions, and vendor accounts.