Internal account and external account are two commonly used concepts in accounting. Simply put, internal accounts refer to accounts maintained and managed within a company or organization, while external accounts refer to accounts involved in transactions with external units or individuals.

1, meaning of internal account

Internal accounting is an important tool for enterprise internal financial management and decision analysis. It records the occurrence, changes and results of various economic businesses within the enterprise, including capital transactions, accounts receivable and payable, fixed assets, costs and expenses, etc. Through internal accounts, enterprises can clearly understand their own financial situation and operation, and provide basis for business decision-making and financial analysis.

2. The importance of external accounts

An external account is an account opened by an enterprise when it conducts economic exchanges with external units or individuals. For example, accounts receivable established by enterprises with suppliers, accounts payable established with customers and cash accounts established with banks are all external accounts.

The external account records important information such as capital exchange, transaction amount and transaction date between the enterprise and external units or individuals, and reflects the relationship and transaction between the enterprise and external economic entities.

3. The difference between internal account and external account

Internal accounting refers to the bookkeeping and management within the enterprise, which mainly involves the capital flow and economic business within the enterprise; External accounts are accounts involved in transactions with external units or individuals, which mainly record the transactions and capital exchanges between enterprises and external units or individuals.

Internal accounts are mainly used for internal financial management and decision analysis of enterprises to meet their own business needs; External accounts are mainly used for trading and settlement with external units or individuals to ensure the authenticity and accuracy of transactions.

Internal accounts can design their own accounting system and subject system according to the needs of enterprises, which is flexible and changeable; External accounts usually follow the relevant national accounting standards and regulations, and have certain unity and standardization. Although internal account and external account are two different concepts, they are closely related and influenced each other.

The data in the internal account will eventually be reflected in the external account, and the changes in the external account will also be reflected and adjusted through the internal account. For example, the internal sales revenue of the enterprise will be reflected in the accounts receivable of the external account after accounting in the internal account; After the enterprise passes the internal cost accounting, it will reflect the cost information in the accounts payable of the external account.