Accounting



Accounting

All businesses need to make sure their financial records are in order and that payments both in and out are up to date. An accountant will prepare annual accounts to show how much profit (or loss) your business is making and how much tax needs to be paid. Accountants can also provide advice on how to minimize your tax liabilities, and can assist growing businesses with financial issues.

In practice, most businesses use external accountants to provide services ranging from basic bookkeeping to tax advice or strategic business planning. Your accountant is likely to be your most trusted business adviser, so it is worth taking the trouble to make the right decision when choosing which individual or business to use.

What services does an accountant offer?

  • Start up advice. An accountant can advise on the best legal status for your business, and can assist with other legal and taxation issues.
  • Bookkeeping. Many businesses take care of day-to-day bookkeeping themselves, but an accountant can advise on which records to keep and which format to use (such as manual or computerized).
  • Preparing annual accounts. Many small businesses use an accountant to produce key annual financial statements, such as the profit and loss account and the balance sheet.
  • Preparing tax returns. A good accountant - using their working knowledge of the rules, regulations, exceptions and case law that apply to your business sector - can often achieve tax savings.
  • Business advice/management accounting. Once your business is up and running, an accountant can set up systems that will monitor performance and budgets, and improve efficiency. They can provide specialist advice and an independent perspective on business progress and possible developments.

A CPA is a certified public accountant that, in addition to traditional audit services, such as examining the annual reports of public companies, stay up-to-date on current tax laws and regulations, which can save you substantial amounts of money. A CPA is licensed by a state, and must keep current with tax laws in order to maintain a license in that state. Accountants aren't licensed. The CPA exam is a rigorous process over several days, including many facets of financial and tax expertise.

An accountant actually has a wide variety of responsibilities. Their most commonly encountered job consists of working with your financial records. Most people don’t realize the importance of the accounting department in keeping a business operating without hitches and delays. That’s probably because accountants oversee many of the back-office functions in a business — as opposed to sales, for example, which is front-line activity, out in the open and in the line of fire.



Choosing an Accountant

Business is composed of a set of interrelated system that will ensure the smooth flow of business process and convert capital to revenue efficiently. It is important for a business owner to consider each component as if it is just the existing system inside the process. Thus, utmost importance and consideration must be given to each process component, which includes the accounting process.

Accounting involves processes in which important financial information of a particular business is recorded, summarized, evaluated, and interpreted. Furthermore, since money is one of the biggest factors that may affect the existence of a business in a certain market, accounting is given utmost attention and consideration at all times.

Accounting outsourcing is considered to be one of the more effective management tool, thus many companies often incorporate outsourcing as one of their strategies in business planning. The Outsourcing Institute reported that the concept of a CRO (Chief Resource Officer), a professional outsourcing executive manager, is widely-acceptable in larger corporate organizations. However, you need not to be a large corporation to benefit from accounting outsourcing. Even small and medium-sized enterprises can provide better service and produce high-quality products in a more cost-efficient way if they will outsource their non-core business processes, including the accounting aspect. By decreasing the demands on your administrative personnel, you will be able to free them from additional responsibilities and they will be able to support areas directly to your sales, clients, and to the marketing task of your business.

Accounting outsourcing firms can execute your accounting and bookkeeping tasks in all frequencies (monthly, quarterly, and annually) or can supplement your present administrative staff to lessen the responsibility. Here is a summary of the services you can acquire from outsourcing your companyís accounting process:

  • Preparing cash disbursement checks;
  • Preparing input credits and bank deposits;
  • Preparing company payroll;
  • Preparing tax deposits and bank reconciliation;
  • Preparing financial statements;
  • Preparing payroll tax returns; and
  • Evaluation and review of financial results on different frequencies.

With accounting outsourcing, you will be able to see the benefits of having a cost-efficient business operation. With your accounting process at the hands of outsourcing professionals, you can focus to the core of your business and convert every cent of your working capital into hundreds to thousands of dollars in generated revenues and profits.

Accounting Software

One of the most important aspects of running any enterprise is to have accurate records of the money flowing in and out of your business. Using a computer-based accounting system can offer many benefits and enable you to keep track of the business' finances.

What are the benefits of using accounting software rather than manual systems?

The traditional method of paper-based, double-entry bookkeeping is labor-intensive and inflexible. Moving to a computerized accounting system enables you to track your business finances on a day-to-day basis and to forecast different income and expenditure scenarios quickly and easily. Manual systems cannot offer the speed, accuracy and flexibility that a computer-based system can.

Using accounting software can help you to:

  • Track your sales.
  • Maintain control over your costs.
  • Budget for the future development of your business.
  • Improve the overall efficiency of your business.
  • Compile your tax records for submission
  • Ensure your business pays the right amount of tax
  • Generate your company accounts
  • Process payroll.

What features should you look for in an accounting software package?

There are a number of key factors that will influence the type of accounting package best suited to your business. The legal structure of your business is one aspect which will determine which type of accounting software you will need.

Most accounting software has a standard set of features but you should assess carefully what your business needs from its accounting system. Generally, think about these main functions and decide if you require these features:

  • Payroll for any staff you have can be handled easily by accounting software, but you must match the number of employees you have to the software you buy.
  • Debt control is vitally important in businesses with a lot of suppliers or customers whose invoices need to be tracked accurately.
  • Sales tax or VAT is one of the areas that accounting software can make painless and efficient, but you need to ensure your records integrate seamlessly with the other areas of your business managed by the accounting software.
  • Reporting and analysis are two of the most important aspects of any accounting package. You should be able to run reports to analyse every aspect of your business' performance.
  • Do you have specialized needs? Some applications are designed especially for certain businesses such as retailers and online businesses.
  • Do you need to connect with any of your suppliers' systems? For instance, some retailers need your financial systems to accept purchase orders in a particular electronic format.
  • Do you want to be able to link your accounts software with your online banking?

What accounting software is available for your business?

There are many accounting packages to choose from, some of which are PC or Mac-based software packages, and others that are available as hosted solutions accessed via the Internet or 'the cloud'.



Becoming An Accountant

If you want to pursue an accounting course, you should first choose a university or college. There are local universities and colleges that you can enroll in for an accounting course. If you prefer attending college abroad, you may do so. But make sure that you choose the university or college wisely. You also have to determine where you will stay when youíre already there; you can either stay at the dormitory or you can rent an apartment. Expenses are a great consideration as well.

Accounting has four general areas, namely Ė public, government, internal auditing, and management accounting. If you choose an accounting course, you will learn how to prepare and organize financial reports that include collation or calculation of a range of figures, analyses, tax, and even projections.

Traditionally, the study of accounting focused mainly in the technical skills. The traditional methods in the study of accounting include teaching the basic principles and concepts of accounting. The present accounting practices havenít adapted yet to the various changes in business, regulatory environment, and economics. There are now modern methodologies used in accounting education. These methodologies are based mainly on accounting communication, decision-making, ethics, analytical skills, and the internal auditing principles.

Educational programs in accounting have the same objectives and one is to teach the students about the various accounting principles. Aside from that, the students will also learn to develop their skills through various accounting practices. Professional accountants today have greatly benefited from modern accounting education. Accounting education also functions as an effective management tool for business executives.

The educational components of an accounting education are specialized accounting, general accounting, and professional accounting. These days, accounting students can also take advantage of doctoral programs and other continuing educational programs.

Is accounting education right for you? Before you finally enroll in an accounting course, you have to be very sure that you like business matters. You see, accounting is more on business matters and mathematical computations. It also involves a lot of analyzing tasks.

Once youíve decided that an accounting course if the best for you, find a university or college now; you can either go to college abroad or you can attend school locally. Every step involves making decisions. So make sure that you make the best decisions because your future lies with it.

Once you start your accounting classes, you have to study all your lessons and know them by heart. This is the only way to become a successful professional someday. And of course, you need to pass all your exams so that you will soon hold your diploma.

There are many career opportunities for accounting graduates. Again, if you think that an accounting course is the best for you, enroll now. Study hard and master the principles and concepts of accounting. Only by then can you say that youíre an effective and efficient accountant.

Most accountant and auditor positions require at least a bachelorís degree in accounting or a related field. Some employers prefer to hire applicants who have a masterís degree, either in accounting or in business administration with a concentration in accounting.

A few universities and colleges offer specialized programs, such as a bachelorís degree in internal auditing. In some cases, those with associateís degrees, as well as bookkeepers and accounting clerks who meet the education and experience requirements set by their employers, get junior accounting positions and advance to accountant positions by showing their accounting skills on the job.

Many colleges help students gain practical experience through summer or part-time internships with public accounting or business firms.



U.S. Licenses, Certifications, and Registrations

Every accountant filing a report with the Securities and Exchange Commission (SEC) is required by law to be a Certified Public Accountant (CPA). Many other accountants choose to become a CPA to enhance their job prospects or to gain clients. Many employers will often pay the costs associated with the CPA exam.

CPAs are licensed by their stateís Board of Accountancy. Becoming a CPA requires passing a national exam and meeting other state requirements. Almost all states require CPA candidates to complete 150 semester hours of college coursework to be certified, which is 30 hours more than the usual 4-year bachelorís degree. Many schools offer a 5-year combined bachelorís and masterís degree to meet the 150-hour requirement, but a masterís degree is not required.

A few states allow a number of years of public accounting experience to substitute for a college degree.

All states use the four-part Uniform CPA Examination from the American Institute of Certified Public Accountants (AICPA). Candidates do not have to pass all four parts at once, but most states require that they pass all four parts within 18 months of passing their first part.

Almost all states require CPAs to take continuing education to keep their license.

UK Qualified Accountants

CCAB-qualified accountants is an informal shorthand for full members of any of the UK accountancy bodies formed by royal charter. All six of these bodies founded the Consultative Committee of Accountancy Bodies; CIMA left after 2011, but its members may still be intended when this phrase is used.

The British Government's Department for Business, Innovation and Skills, implementing the Companies Act allows members of six bodies to act as auditor to a limited company. These are the five member bodies of CCAB, and the AIA. In the European Union, under the EU mutual recognition directive, members of these six bodies may practise auditing in other EU member states, with 'absolute equal status'.

In addition, there are other non-CCAB bodies whose members also provide accountancy and related services.

The chartered bodies and the AIA (which is the other Recognised Qualifying Body) admit members only after passing examinations and undergoing a period of relevant work experience. Syllabi and methods of assessment vary between these bodies, and may include a project, case study or viva (One-to-one case study and oral examination). Candidates who hold degrees in accounting or related subjects may be exempt from certain papers. Some bodies, including ICAEW, provide direct membership exchanges and short routes to admittance for members of certain overseas bodies. Once admitted members are expected to comply with ethical guidelines, gain appropriate professional experience and undergo continuing professional development.

The other bodies recognise academic qualifications and work experience.

Most bodies offer Fellowship after five or ten years' further experience in good standing as an Associate member.


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