There are various parties or users who are interested in the business of an enterprise and require accounting information. These users can be bifurcated into two categories as Internal Users and External Users.
Internal Users
These are the users who are internal to an organization. Such users have straight access to the financial statements of a business. The following users are included within the category of internal users.
Owners: These are the persons who make investments in the business. These have an interest in knowing the profit earned or loss incurred during an accounting period. They are curious about assessing the profitability and viability of the capital invested by them within the business. The financial statements developed by the business concerns enable them to have sufficient information to assess the financial status and financial health of the business.
Management: Management is an integral part of an organization. They are nourished in drafting plans, decision-making process, evaluating past performances, etc. The financial statements enable the management not only in drafting policy measures and planning but also inefficient implementation of the plans. With the help of information revealed by the financial statements, management can not only enhance the efficiency of the business but also exercise various cost-controlling measures to remove inefficiencies.
Employees and Workers: They are interested in the timely payment of wages and salaries, bonuses, and appropriate increments in their wages and salaries. With the help of the financial statements they can know the amount of profit earned by the company and can demand a reasonable hike in their wages and salaries. The financial statements also assist them to assess their individual career scope and their growth prospects.
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Bookkeeping
Bookkeeping is mainly concerned with identifying the transactions of financial nature, recording them, and maintaining their systematic record in the books.