5 types of accounting services

Five Types of Accounting Services

Accounting over the years has experienced tremendous evolution. To the layman, the services an accountant can provide may seem limited to bookkeeping, mundane data management, and paper filing. This could not be further from the truth.

But, the fact is that accountants today are qualified professionals capable of undertaking a range of complex roles, including FP&A, deductions management, process reengineering, cost optimization, and projections.

Accounting has outgrown its past and with the abundance of data and technology, businesses today can leverage accountants to gain a competitive advantage.
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chart of 5 types of accounting services

1. Bookkeeping

The simplest and best-known accounting service is bookkeeping. Bookkeeping refers to the maintenance of a business’ financial records.Bookkeepers are necessary for any business today to keep track of the transactions. Without a dedicated bookkeeper, businesses may quickly find themselves stranded in managing influx of financial data. Many business owners opt to do it themselves but eventually, the role must go to a dedicated bookkeeper as the business scales. Here are some tips to help find the best bookkeeper for your business.

2. Financial Analysis and Consulting

The data that is recorded during bookkeeping is not just for maintaining a record. This data can be put to further use in the hands of an accountant and later a financial analyst. An accountant can translated the bookkeeping records into financial statements while a financial analyst translates these financial statements into into meaningful conclusions for decision-making. Through this analysis, business performance can be gauged, and by comparing it to industry competitors, the management can get an accurate picture of the performance gaps and targets. Financial analysis can also help in making important decisions such as budgeting and project investment. Planergy provides an insightful dive into the intricacies of financial analysis. Businesses that fail to recognize the value of financial analysis are feared to lag behind in competitive strength.

3. Internal Auditing

While all the data and processed information is useful, it is also necessary to ensure it’s accuracy. This is where internal auditing becomes a key requirement for any business. Mega corporate scandals such as the Enron led to enactment of the Sarbanes-Oxley Act (SOX) in 2002, which places the onus of ensuring accurate financial reporting on the top management of the business. This is crucial information every small business owner should know, and the financial data must be audited to mitigate the risk of penalty. This is one of the most important services a business must avail from their accounting department to ensure smooth sailing.

4. Tax Accounting

Taxes are one of the major concerns of the accounting department. A business is obligated to pay taxes but navigating through this complex process is challenging. This is where having a dedicated tax accountant can prove immensely beneficial. A tax accountant is primarily responsible for ensuring compliance with tax regulations and determining the taxes to be paid and mitigating the company’s tax liability.

By having a reliable tax accountant, businesses can save a hefty amount that can be used in business expansion.

5. Financial Controlling Services

A financial controller is the last line of defense of the accounting department and is responsible for leadership and oversight of a company’s accounting & finance matters .Accountingweb reports that 27% of accountants surveyed by Bloomberg BNA cited human error as the leading cause of accounting mistakes. Financial controllers are tasked with reviewing all activity in the accounting department and detecting any such errors in the process. Without a financial controller, there is an immense risk of internal fraud and unnoticed errors, which can end up costing the business dearly. It is, therefore, a very prudent choice to have a trusted controller in charge of the accounting & finance affairs and running the department smoothly.

The Road Ahead

Maintaining an in-house accounting department sounds ideal, but the costs and administrative hassle associated with it can prove challenging. An affordable alternate to it can be a high-quality outsourcing and/or staff augmentation partner. Today, it is easy to find competent outsourcing and staff augmentation firms dedicated to providing multiple accounting services under one roof at a fraction of the comparative cost. By opting for outsourcing and/or staff augmentation, business owners gain access to accounting & finance professionals and services that best suit their tailored needs.

 

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