What Are The Basic Types of Accounting Services You Must Know?

Certain Types of Accounting Services May Fit Your Current Needs

Accounting is more than just the equation “Assets = Liability + Equity”. It has evolved from Luca Pacioli’s methodologies during the 14th century to the practices we know and apply today. Because of this, different types of accounting services have branched out and flourished. Having said so, the fundamentals of this field still reflect deeply to their roots.

However, there are also evidently significant differences between these types of accounting services. This is due to the fact that the world we live in is more complicated than before. Several business practices that had existed a long time ago may have been obsolete by now already. Additionally, there have been advancements in every aspect of human civilization, like technological progress and the Industrial Revolution. Such a proverbial boom demands more complex and systematic mechanisms and measures. A basic and linear accounting approach won’t work very well.

To cope up with this, you must be knowledgeable about the different types of accounting services that are existing today. Once you’ve applied this information to your business, you’ll be able to specialize in areas that require in-depth attention. Here are some of the accounting branches you need to know.

 

Bookkeeping

Every individual with a business mindset should consider bookkeeping as a fundamental step in assessing their finances. From the preparation of financial statements to the recording of transactions, this service builds a framework to determine your current financial status.

It’s only natural to hire a CPA’s services to ensure accuracy and neutrality in your records. This applies especially if the business is too extensive. SME’s, on the other hand, can hire more basic services or even do it on their own.

Examples of financial statements include a cash flow statement, income statement, and Balance sheet. Each statement can help you decide the next course of action, or the direction your business should proceed. For instance, is it feasible to gather capital by adding more loans? In this case, you could settle the dilemma by figuring out your current liabilities. Unsettled debts can be a major issue, but you may not have been aware of them in the first place. Well, bookkeeping can help you with that.

 

Tax Accounting

Taxes are the lifeblood of a nation, it seems. This textbook definition sounds utterly obligatory, but it is what it is. The only thing you can do is follow these statutes. However, tax laws are admittedly confusing and, forgive the pun, too taxing to fully memorize.

Well, tax accountants exist for a reason. Being one of the most indispensable types of accounting services, tax accounting saves you time and effort in a ton of ways. First, you’ll never worry anymore which regulations to follow, since there are experts who’ve mastered the concepts by heart already. Of course, you still need to know the most vital ones, but you can leave the complex terms to the pros.

Also, there are tax returns and reductions which you may benefit from, thanks to a tax accountant’s assistance. They can advise you how to lessen your levies without infringing the laws.

 

Management Accounting

This accounting field is essentially more intermediate and internal than the former two. Judging from the name itself, businesses with organizational or managerial functions can apply this service. Further services include asset management, performance evaluation, budgeting, and cost management, among others.

In a nutshell, it caters more to your company’s objectives and goals. Accountants can guide you in assessing more general financial decisions. SMEs may hire CPA’s specializing in this branch, but it depends on your resources at the moment. Usually, the costs for these services are not cheap, so take that with a grain of salt. Perhaps you can skip it for now though if you’re not that ready yet.

 

Consultation Services

This service can go along with management accounting, but they are more in-depth in design. Some managerial accountants only provide you with numbers and a bit of explanation. You’re fortunate if the expert you’ve hired inquires you regarding the overall or comprehensive standing of your business.

Accountants providing these services should also have a wide knowledge of how businesses work. You’d prefer to hire someone who has studied Master or even Doctorate degrees. These professionals will not only cite the nitty-gritty; they will be more candid with their opinions. They will evaluate your business, comparing it to your previous years, for instance. After that, they will strategize on how you can profit based on what you realistically have.

 

Final Note

These are the basic types of accounting services you can find. Depending on the nature of your finances, you can decide which one’s applicable for you right now. To be more certain though, we can provide you with a simple counseling session to help you out.