Know About Accounting Firms and Their Services
Financial accounting is a general branch of accounting dealing with a method of reporting, assessing, summarizing, and interpreting the financial transactions resulting in a financial report. Financial accounting includes all the works relating to financial records and reports that produce information for decision making by managers, owners, stockholders, tax authorities, and auditors. All kinds of businesses operate on a cash-flow basis; therefore all business transactions are recorded in terms of cash flow. There are two methods of recording financial accounting: namely, as a waterfall system or as an alternating-balance method. In addition there is the single-entry bookkeeping system also referred to as block or bar chart, which is usually used as a main display screen in many organizations.
Many small businesses do not have any special accounting software or accounting program. Small business owners find it cheaper and easier to outsource their financial accounting needs to specialized firms. The accounting software and other support services that these companies provide are managed by dedicated, independent accountants. A number of such firms are available in the market offering expert financial reporting and accounting services to small businesses.
A number of outsourced agencies provide professional financial reporting and accounting services to small businesses. Many accountants operating in this specialized field are registered with the IRS (Internal Revenue Service). This makes them qualified to provide tax advice to the firm. They provide efficient tax services to maximize the profits of the firm and minimize the tax liabilities of the firm. Some small firms also hire internal tax accountants for the purpose.
Generally there are three types of financial accounting principles accepted by most governments around the world. These are Generally Accepted Accounting Principles (GAAP), Generally Accepted Accounting Principles (GAP) and Strict Standard Accounting Principles (SSAP). Every country has its own set of rules and regulations pertaining to tax matters. The choice of which accounting principle is to be used as a standard by the accounting firm depends on the requirement of the country. It is always advisable to hire an accountant who follows the accepted accounting principles, even if it is more expensive.
Under GAAP (Generally Accepted Accounting Principles), the main principles which are accepted and used worldwide are Internal Accounting Methods (IAuctions, Incisions, And Events). Some of the major topics covered under the topic are the recognition of revenues, the preparation of internal balance sheet, measurement of assets, liabilities, and ownership interest etc. Under GAP, various methods are chosen to achieve the same objective. Major aspects under this topic are internal controls and control measures, identification of sources for auditing, appraisal of the balance sheet, allowance for liability and valuation of assets and liabilities.
Strict Standard accounting principles are different from the GAAP principles. Under such principles there are four major sections to be followed which are the income statement, balance sheet, statement of cash flows and note. The income statement shows the income generated during a month, the balance sheet includes the balances as of the last day of the reporting period and includes the assets, liabilities, and ownership interest. The statement of cash flows helps in the preparation of the financial data and helps in taking the decision related to the finance.
There are many companies available who provide support for both income statement and the balance sheet of the company. However, the companies provide these services at a fee, which means that they charge for the service they provide. There are companies which provide accounting solutions free of cost or at a minimum price. The companies, which charge a fee for providing the service basically use the cost to cover their costs and generate profit from the business. This means that the company would not have profit but only loss.
There are many types of accounting firms available for each and every company. However, the choice of the accountant or firm should be made on the basis of the size of the firm and the kind of help required by them. Some of the professional services that can be availed by the companies are QuickBooks Certified Accountant, CPA, Chartered Certified Accountant, Field Service Company, Microsoft Office Manager, Peachtree Consulting, KPMG, Pepper Hamilton, and many more. Every type of accountancy service can be used by a firm for free or at a nominal fee depending upon the need of the company.