Page 147 - DLIS003_LIBRARY ADMINISTRATION AND MANAGEMENT

Library Administration and Management

Notes capital is being employed properly or not. Owners, being businessmen, always keep an
eye on the returns from the investment. Comparing the accounts of various years helps in
getting good pieces of information.
(ii) Management: The management of the library is greatly interested in knowing the position
of the firm. The accounts are the basis; the management can study the merits and demerits
of the business activity. Thus, the management is interested in financial accounting to find
whether the business carried on is profitable or not. The financial accounting is the “eyes
and ears of management and facilitates in drawing future course of action, further
expansion etc.”
(iii) Creditors: Creditors are the persons who supply books and other material to the library
on credit, or bankers or lenders of money. It is usual that these groups are interested to
know the financial soundness before granting credit. The progress and prosperity of the
firm, two which credits are extended, are largely watched by creditors from the point of
view of security and further credit. Profit and Loss Account and Balance Sheet are nerve
centres to know the soundness of the firm.

(iv) Employees: Payment of bonus depends upon the size of profit earned by the firm. The
more important point is that the workers expect regular income for the bread. The demand
for wage rise, bonus, better working conditions etc. depend upon the profitability of the
firm and in turn depends upon financial position. For these reasons, this group is interested
in accounting.
(v) Investors: The prospective investors, who want to invest their money in a firm, of course
wish to see the progress and prosperity of the firm, before investing their amount, by
going through the financial statements of the firm. This is to safeguard the investment.
For this, this group is eager to go through the accounting which enables them to know the
safety of investment.

(vi) Government: Government keeps a close watch on the firms which yield good amount of
profits. The state and central Governments are interested in the financial statements to
know the earnings for the purpose of taxation. To compile national accounting is essential.
(vii) Consumers: These groups are interested in getting the goods at reduced price. Therefore,
they wish to know the establishment of a proper accounting control, which in turn will
reduce to cost of production, in turn less price to be paid by the consumers. Researchers are
also interested in accounting for interpretation.
(viii) Research Scholars: Accounting information, being a mirror of the financial performance
of a library, is of immense value to the research scholar who wants to make a study into
the financial operations of a particular firm.

To make a study into the financial operations of a particular firm, the research scholar needs
detailed accounting information relating to purchases, sales, expenses, cost of materials used,
current assets, current liabilities, fixed assets, long-term liabilities and share-holders funds
which is available in the accounting record maintained by the firm.

Notes The purpose of a library accounting system is (a) to show that all applicable legal
provisions have been complied with; and (b) to represent fairly and accurately the financial
position (Balance Sheet) and results of financial operations (Income Statement) of the
library’s funds and account groups.

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