Friday, 15 September 2017

How Can I Apply Accounting In My Personal Life

Accounting is one of the fundamental activities of any business. Without it, a company would be similar to a blind person driving a high-speed car. They may know how to do business, but they would be blind to important signals that Accounting can give them.

However, it is not only businesses that need Accounting for them to survive. Unbeknownst to many, even regular people like us are using it every single day. We use accounting to check our finances, manage our bills, and even for something as simple as buying groceries.

Surprised? Well, this simple explanation by Investopedia of what Accounting is may help you grasp the idea:

“Accounting is the systematic and comprehensive recording of financial transactions pertaining to a business, and it also refers to the process of summarizing, analyzing and reporting these transactions to oversight agencies and tax collection entities.”

-Investopedia

Although it is specifically about businesses, by reading it, you should a hint on how it applies to our lives. Let us try to use this definition of Accounting on something we often do in our personal lives, namely groceries.

How We Use Accounting Everyday

When cooking something at home, the first thing we often do is check if we have any supplies left. If not, the next thing we’d do is list down all the items that we will purchase in the store.
After you get all the things you need, you proceed to the cashier to pay them the total price of your groceries.

Finally, you rigorously count your change to make sure that there is no overage or shortage. If you find any, you are most likely going to approach the sales person to correct the error.

We’re you able to identify which parts were actions you did were related to accounting? If yes, then good job! But if not, then here’s a simple explanation on how groceries is related to accounting. Summarizing; by looking at your refrigerator, you were already summarizing which items you will buy and which ones you will not.

Analyzing; the act of counting your change to know whether they gave you too much or too little is like an accountant investigating if their business is receiving the correct amount of cash or revenue (auditing).

Reporting; lastly, reporting is when you try to communicate your data to other parties. Hence, when you explained to the cashier that she gave you too much or too little change, you are reporting to her based on how you analyzed what you previously summarized.

With every choice we make, whether for major or minor decision, we are unconsciously using the principles of accounting. Hence, it is an inescapable part of everybody’s lives. Nevertheless, there are also other ways that you could apply accounting to make your life better or earn/save some more of that sweet, sweet money.

Other Ways You Can Apply Accounting In Life

Budgeting Your Money

Most companies hire accountants at the beginning of every business cycle to help them determine the best way for them to spend their existing assets. The reason for budgeting is that it would assist them to avoid wasting their money or resources due to poor planning.

Private people can use the budgeting principles in accounting to help them allocate their salaries. Furthermore, it could help them avoid unexpected shortages due to overspending. Budgeting our expenses are not just limited to long term things like education, or retirement, but also to things that you engage daily like your fare or meals.

Tracking Your Expense And Income

After we budget our expenses, it is important that we know how to follow through it by tracking how we spend our money. Tracking is more of a continuous action that we need to do every time money leaves or enters our pockets.

By tracking our expenses, we can adjust our budget accordingly to accommodate new plans or information that was not available when we first budgeted our money.

Saving For The Future

The best case scenario after budgeting and tracking your expenses is having some leftover money that you can save. Savings are the result of well-planned budgets and careful tracking of expenditures. It allows you have some leeway for next month for emergencies and unexpected expenses.

Furthermore, by being able to save some money, you can be more assured that there is a smaller possibility of you having financial crises.

Investing To Make More Money

Lastly, if you were able to save enough money due to following the first parts of this section, the best move for you is to invest it let your money grow on itself.

You can invest your money in passive investing platforms like stocks, forex, bonds and more. You also have the choice to start up a business that you think would help you make more money than you already have.

There are many options for an individual to invest, all of which will need for you to apply more accounting. Lastly, it is also at this point that you’ll need to start considering asking for the help of professional accountants.

Regardless of how you use accounting in your life, the Aldaris CPA Group is here to help you grow your potential. Contact us for our individual and family consulting services and let us show you how we can help you with your personal finances.

The post How Can I Apply Accounting In My Personal Life appeared first on Aldaris CPA Group.

Friday, 8 September 2017

What are the Most Common Accounting Software Used?

Most accountants train to work with the simplest tools that generations of accountants before them used. However, There may come the point in your career that you will work for a company that too large or too complicated to stick by this traditional means of accounting.

Luckily, modernization has innovated most of the jobs around the world, and the accounting profession is no exception to that. Hence, to keep up with other professional, it is important that one learns about the latest and most common accounting software’s used in the market.

Why Are Accounting Software Important?

Most accountants engage in hundreds, if not thousands, of transactions every single day. Furthermore, they would have to summarize and present these transactions with the highest level of accuracy possible. This rigorousness of their job is because, at the end of the period, these reports would be a major of basis of future decisions.

Before accounting software existed, they’d have to record each one these transactions of their books manually. Hence, not only was their job several times harder before, the accuracies of their reports were highly unreliable. Thanks to accounting software, all these changed.

Most Common Accounting Software

To help you find the best software for you and your business. We’ve listed below 5 of the most used Accounting software by companies today:

QuickBooks Accounting

QuickBooks is one of the most famous accounting software in the market. California-based financial software company Intuit released the first version of the software in 1998 to cater for the need of simplified accounting platforms. Today, QuickBooks, according to the company, holds an estimated 85% of the retail market.

QuickBooks Online lets you see how your business is doing instantly.

QuickBooks Website

The software is available in three variants. The first one is the original desktop version of the software. The desktop-version offered the user various services such as remote payroll assistance and outsourcing, remote access capabilities, online banking and reconciliation, electronic payment functions, and more.

QuickBooks also has a cloud-based service called QuickBooks online. The product is available to users who are willing to pay a monthly subscription which provides them exclusive access to QuickBooks online platform.

Lastly, QuickBooks Point of Sale is one of the newest offerings of Intuit. It aims to replace traditional cash registers by offering other functions such as inventory tracking, customer information, sales, and more.

Xero Accounting

Unlike QuickBooks, the New Zealander Rod Drury and his personal accountant created the software more recently in 2006  to compete with what he believed were outdated accounting software in the market.

Xero is offered as a “software as a service” product where users can access the platform by paying monthly subscriptions. Since its initial release, the product is now available in over 180 countries worldwide.

Some of the major offerings of the software are automatic bank and credit card account feeds, invoicing, accounts payable, expense claims, fixed asset depreciation, purchase orders, and standard business and management reporting. Some of which are not available to others.

FreshBooks Cloud Accounting

FreshBooks caters specifically to smaller service based businesses. The original version of the software was created in 2003 by Canadian entrepreneurs Mike McDerment and Joe Sawada. Three years later they rebranded it to FreshBooks to suit the changing taste of internet users.

The all-new FreshBooks is accounting software that makes running your small business easy, fast and secure. Spend less time on accounting and more time doing the work you love.

FreshBooks Website

One of its biggest advantage over its competitors is its responsive mobile app. Users can access the software while on the go making the product easy to use for freelancers and small businesses. Furthermore, it also offers some necessary functions such as cloud invoicing, reporting, and payment processing.

Wave Accounting

Launched just in 2009, Wave Accounting is one of the newest players in the accounting software market. According to their website, they manage at least $175 billion in revenue and expenses of their customers worldwide annually. The company initially offered the software as a double entry accounting tool.

Wave Accounting Inc. then made available other financial services such as Payments by Wave (credit card processing), Receipts by Wave, Invoice by Wave, Payroll by Wave, and Lending by Wave. All of which is available to anyone for up to a certain number of employees.

Sage 50 Accounting

Lastly, Sage 50 Accounting, formerly known as Peachtree, is offered by the third largest supplier of enterprise resource planning software worldwide namely The Sage Group Plc. It is a subscription-based business management software available to businesses of all sizes.

[Sage] delivers built-in accounting best practices to keep your business finances on track and help you stay compliant with taxes and reporting requirements.

Sage Website

Users can integrate the software with the functions of Microsoft 365 making reports easier to process. Furthermore, it offers an integrated data checker to weed out common mistakes committed by accountants, security functions that allow the users to track who is entering their database, stock management and more.

The post What are the Most Common Accounting Software Used? appeared first on Aldaris CPA Group.

Friday, 1 September 2017

Accrual Vs. Cash Method Of Accounting

As a business grows and prospers, the need for a reliable recording and understanding of their daily transaction becomes more evident. Moreover, the necessity of hiring a professional accountant to apply the fundamental principles of accounting can no longer be ignored.

However, before an accountant could even begin to record the very first journal entry, they would need to decide on some important matters first. And no other choice is more significant than the choice between accrual and cash method.

The accrual basis and cash basis are two of the most common methods of recording transactions. They determine the timing and valuation of most account records. Every type of business can only be best accounted for by either one of them. Thus, the choice between the two is one of the hardest and most critical decisions a business needs to decide.

Lucky for you, we have created this simple article to guide you on which accounting method best suits your type of business.

Accrual Basis Of Accounting

Also known as the accrual method, the accrual basis is the most commonly used method between the two. According to this method, revenues may only be recognized when they are earned. This means, getting paid for a service, does not automatically permit you to record an income in your income statement. It is necessary that you have performed the service first before you can say you can do so.

The expenditures of your business, on the other hand, may only be recognized when either it has been actually used, or when its related income has been recognized. For example, a rim of paper that you have previously bought may not be recorded as an expense until they have been printed on or disposed of. (1)

Pros And Cons of The Accrual Method

The accrual method is preferred by many accountants as it helps represent the real value of the business more than the cash basis. This approach also follows the matching principle of accounting. According to the matching principle of accounting, related incomes and expenses should be recognized at the same time or period.

Hence, the accrual basis can represent a business’s performance for a particular period more accurately and reliably. However, one of the most significant issues of the accrual method is that it requires more effort to implement.

Accountants who use this approach are needed to monitor and remember certain accounts that need to be adjusted due to subsequent events. Another problem is that the recording of incomes and expense do not usually coincide with the issuance of receipts and invoices.

This requires accountants to do some guesswork to value subsequent adjustments in particular account titles. Lastly, the rules and regulations of the accrual method are far more extensive than the cash method; thus, requiring accountants to know hundreds if not thousands of principles and standards.

Who Must Use The Accrual Method Of Accounting

The accrual method is most suitable for businesses that have a few recurring or many, but similar, transactions. Using the accrual method in companies that have hundreds or thousands of unique products can be very troublesome if not impossible an accountant to perform.

Some businesses that are recommended to use the accrual method are:

  • Car dealerships
  • Groceries
  • Services Companies
  • Computer Stores

Cash Basis of Accounting

The cash basis of accounting is a simpler and straightforward counterpart of the accrual basis. The recording and recognizing of income and expenses through this method is based on the physical movement the cash account.

Hence, revenues are recognized when the business gets paid, and the costs are recorded the company pays. This method is used by many small and medium businesses. This is because it is incredibly easy to implement even by someone who has minimal training in the accounting profession.

Pros And Cons Of The Basis Method

As was stated above, the cash basis of accounting is simpler and easier to use for any business. It also consumes lesser time to implement since fewer analytical procedures are needed to value various account. Furthermore, the cash basis is cheaper for smaller companies because there is a lesser need for them to hire well-trained accounting professionals.

However, all these advantages come with a price. The cash basis is rarely able to represent a business’s real value correctly. One common reason for this is that companies often buy their supplies in advance. Hence, if these supplies were to be expensed immediately, even those not yet used by the company would pull their net income down.  (2)

Who Must Use The Cash Method Of Accounting

The cash basis of accounting is most suitable for small and start-up businesses. This is because they can invest the money they would use to hire a professional accountant into other growth related sectors of their company. It is also recommended for companies who have many unique products and expenses but have not yet implemented more advanced automated accounting systems.

Some businesses that are recommended to use the accrual method are:

  • Mom and Pops type of shops
  • Newly opened café shops

The post Accrual Vs. Cash Method Of Accounting appeared first on Aldaris CPA Group.

Thursday, 24 August 2017

US Tax Accounting

Tax Accounting is a service on the compilation, organization, and summarization of all relevant business transactions of an organization in compliance with the regulations set by the taxing authority of a country. The purpose of which is to satisfy a recurring (annually, biannual, etc.) obligation to the state.

It is one of the largest industries in the accounting sector partially because of its necessity. Tax preparation services account for a significant chunk of the revenue of the four largest accounting firms in the US, namely Deloitte, PricewaterhouseCoopers, Ernst & Young and KPMG.

Who Governs Taxation In The US?

The United States Federal Government collects on the average 3 to 4 trillion dollars in taxes every year. For the upcoming year 2018, they are expecting to receive another $3.654 trillion dollars across various revenue sources. (1)

Collecting and monitoring such a massive revenue requires the government to create a separate agency to govern tax collection. This is where the IRS comes in.

Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

-IRS Mission Statement

IRS, which stands for Internal Revenue Service, was founded on July 1, 1862 as the revenue collection bureau of the Department of Treasury. They are also in charge of administering the Internal Revenue Code of the US. With its central office located in Washington, DC, the bureau currently employs a least 79,000 individuals. (2)

What Is The Internal Revenue Code?

Formally known as the Internal Revenue Code of 1986, the IRC is “bible” of taxation in the US. The code guides the Internal Revenue Service in conducting their responsibilities. It also contains the guidelines that must be followed by all taxpayers. The US House of Representatives published the code in 1926 before revised multiple times into its current form.

The IRC is broken down into several sub categories namely income taxes, estate and gift taxes, employment taxes, miscellaneous excise taxes, alcohol, tobacco and certain other excise taxes.

Other sub categories include procedure and administration, the joint committee on taxation, financing of presidential election campaigns, trust fund code, coal industry health benefits, and finally, group health plan requirements.

Tax Accounting And The IRC

Taxable income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes his income in keeping his books.

Section 446 of the IRC

Section 446 of the Internal Revenue Code, entitled General rule for methods of accounting, sets the basic guidelines for tax accounting. It emphasizes the method of accounting that should be the basis of the taxable income of the company. It also lists the acceptable accounting methods that a company may use for their tax accounting.

Permissible Accounting Methods

The computation of taxable income can vary significantly depending on which accounting method a company uses. Each method determines the timing of the revenue recognition of a company. Furthermore, it affects every the financial statement of the company, such as balance sheet, income statement, and more.

Listed below are the acceptable accounting methods according to the Internal Revenue Code:

Cash Receipts And Disbursement Method

Cash receipts and disbursement method, cash basis for short, is a revenue recognition method wherein the recognition of income and expenses is directly related to the cash inflow and outflow of the organization. Most of the time, this is because, although the company wishes to use the accrual method, some transactions are too insignificant or immaterial to use the accrual method.

The general rule is that income is recognized when cash is received, while expenses are recognized when cash is given up, regardless whether said income or expenses are earned or used. Furthermore, one major advantage of this method is that it is easier to implement than its counterpart the accrual method.

Accrual Method

Accrual method, on the other hand, is on the opposite side of the spectrum of cash basis. According to this approach, accountants should only recognize revenue and expenses when earned or used up. The accrual method disregards the movement of cash in the organization.

This method is based on the matching principle of accounting. According to the matching principle, accountants should simultaneously recognize income its respective expense when they occur, and vice versa. Finally, the accrual method is more difficult than the cash basis. However, it produces more accurate and reliable financial data. (5)

Combination of Accrual And Cash Basis

Most companies use a mix of both the accrual method and cash basis. Some companies prefer to implement different methods for different types of transactions.

An example of this would be office supplies that are very cheap. No accounting department would want to account for the depreciation for a single stapler. Hence, they would most likely, decide to recognize the stapler as an expense right away. (4)

Key Takeaway

Tax Accounting is one of the first accounting services a company should consider even during their early years. Not only will it help them monitor their tax expenses, but it can also save them from getting in trouble with the Internal Revenue Service.

The Aldris CPA Group offers various tax accounting services such as tax planning and preparation, IRS representation, and estate and trust tax preparation. Contact us or set an appointment through our website and let us help you with your tax needs.

The post US Tax Accounting appeared first on Aldaris CPA Group.

Friday, 11 August 2017

New Phishing Scam Worries IRS

What Phishing Scams Should Taxpayers Avoid This Quarter

Participants of the Security Summit such as the Internal Revenue Service along with other state tax agencies and the tax industry have cautioned tax professionals and businesses about a newly discovered scam.

The scam they were talking about is similar to other phishing strategies done by scammers. It involves an email sent to unknowing victims made to impersonate a legitimate tax software provider. The victim is led to enter vital information such as usernames and passwords to important sites.

The timing of this new phishing scam is not as random as it seems. Scammers coincided the release of these emails with the busy tax season as tax professionals are rushing to beat the the September 15 and October 15 tax extension filing deadlines. This season is also when most tax software providers offer most of their system upgrades.

What are Phishing Emails?

Phishing email messages, websites, and phone calls are designed to steal money. Cybercriminals can do this by installing malicious software on your computer or stealing personal information off of your computer.

-Microsoft Safety And Security Center

As explained on Microsoft’s website, phishing emails are meant to steal someone’s personal information for the purpose of taking money. However, during recent years, the uses of phishing emails have spread to stealing company secrets, blackmailing, or even corporate sabotage.

Phishing emails are no new threat to the corporate world. Scammers had used them as far back as 1995 when American Online (AOL) was still then the largest internet provider. Phishers, people who conduct phishing schemes, then used the email services of AOL to steal user passwords and then used a random credit card number generator to find the account that matches with that password.

The successful matches they made back then were relatively few; however, they were significant enough to cause a lot of people to lose significant amounts of money. Fast forward a few years later, phishers are now targeting not only individuals but even banks and financial institutions.

How Do These Phishing Email Work?

Some common words and phrases that can be seen in these phishing emails include “Software Support Update,” “Important Software System Upgrade,” or the likes. The message of the email would often copy the template of legitimate emails that come from actual software providers.

The email would then proceed to inform or warn the recipient, usually, a tax preparer, that they need revalidate or update their login credentials due to recent changes in the tax software that they are using.

The recipient will then be told by the phishing email to click a button which will redirect them to a website that looks almost exactly the same as the actual website of the real software provider. They will then have to insert their login credentials either to “Update the Account” or “Download Software Updates.”

However, instead of an update, two other things may happen to the unfortunate victim. The website could either take the person’s login credentials for the scammers to access their actual accounts to steal information or the site could install a virus on the victim’s computer which would grant full access to the scammers on the victim’s important files.

Similar types of phishing scams were reported just this June. However, instead of posing as an update for tax software updates, the emails pretended to offer free tax software seminars or education. The scam, on the other hand, primarily aimed to steal identities instead of money.

This would enable the phisher to file fraudulent tax returns under the name of the victim. What gave away this previous scam was that it asked for too much sensitive information from the target.

What To Do According To The Internal Revenue Service

The Internal Revenue Service reminded tax professionals that legitimate businesses and organizations would never ask for sensitive information like usernames, passwords or sensitive data through email. Also, they warned tax professionals to avoid sending such sensitive information to unknown people or through email.

The Internal Revenue Service has a particular email for phishing concerns. If ever you receive or fall victim to any questionable emails that you feel like is a scam, do not hesitate to email them through phishing@irs.gov.

The post New Phishing Scam Worries IRS appeared first on Aldaris CPA Group.

Sunday, 6 August 2017

Two Types of Bookkeeping Methods

The Double and Single Entry Method

Bookkeeping is one of the most important processes in the accounting cycle. In layman’s term, it is the process in which the transactions, both income and expenses, of a business is recorded in the books of the company.

It would be impossible to do any accounting if one were to skip this step. This is because, through bookkeeping, the company is able to gather the critical information needed to paint a picture of how the company is doing.

The history of bookkeeping has been traced as far back as 2600 BC when Babylonians used clay slabs and styluses to record their daily biddings. However, some speculate that it had existed even before 8000 BC when the kings of Jericho used informal records of their properties. (1)

Only two types of bookkeeping are mostly used around the world. One is the single entry system, and the other is the double entry system. Let us discuss the differences between, the advantages and the disadvantages of them both.

The Double Entry System

What is the Double Entry System?

 

The double entry system uses the simple accounting equation “Assets=Liabilities+Capital.” One of the main principles behind the double entry system is the “two-fold effect.” The two-fold effect states that for every value received (debit), there must be a value given up (credit). (2)

It is necessary that an accountant has the skill necessary to determine which elements are affected by a business transaction, and the effect or effects of the transaction on said elements.

History of The Double Entry System

The double entry system was first mentioned by Benedetto Cotrugli in his book “Of Trading and the Perfect Trader.” Cotrugli’s book was able to elaborate some of the fundamental principles that are used in modern day bookkeeping.

In 1494, Luca Pacioli, famously known as “the Father of Modern Day Accounting,” expounded Cotrugli’s work to create the basic blueprint of the bookkeeping system used today. (3)

Advantages and Disadvantages of the Double Entry Method

The double entry method, though preferred, is not a perfect system. There are instances that the single entry is preferred more than it. Listed below are some of the advantages and disadvantages of the double entry method:

Advantages

  1. It allows the company to create and understand financial statements more efficiently.
  2. The business is able to keep a record of every transaction that happens and the effect of it on every element.
  3. It uses the trial balance which makes the accuracy of the books easier to monitor.
  4. It makes the comparison of one period to another easier.
  5. The matching principle allows a company to determine the correct profit and loss of the company with higher detail.

Disadvantages

  1. It is harder to understand for beginners.
  2. The cost to maintain is higher for a double entry system than a single one.
  3. More time is spent to record each transaction.

The Single Entry System

What is the Single Entry System?

The single entry system is the most basic type of accounting. Unlike the double entry system, the single entry method does not need a trained professional for it to be done. With it, the bookkeeper only needs to record transactions in a one sided manner.

This means only the effect on a single element is recorded for every transaction. For example, only the effects on the cash account are recorded for all the transactions conducted by the business. It is way easier than the double entry. However, it carries many more disadvantages than the latter. (4)

History of the Single Entry System

The single entry system dates back as far as accounting itself. Scientists have traced its origins way back in the ancient civilizations. Because of this, not much is known about the origin of it. However, it was the oldest method of accounting used by traders as early as 2000 BC. (5)

Advantages and Disadvantages of the Double Entry Method

As the “prototype” of the modern day accounting, the single entry lacks many features that can be offered by its modern counterpart. Nevertheless, it still has some advantages which make it a better choice for some smaller businesses. (6)

Advantages

  1. Easier to understand and apply for those without a background in accountancy.
  2. No skilled or trained professional is needed to be hired making it cheaper to implement for businesses.

Disadvantages

  1. The single entry method is Hence errors are easier to neglect.
  2. It does not reflect the true profit and loss of the business.
  3. Fraud can be done with ease as there are no counterbalancing accounts to compare to.

To wrap things up, the choice between the single entry system and the double entry system lies with the owner of the business. No matter which method you use, remember to consult a professional to avoid making any errors that may adversely affect your business.

The post Two Types of Bookkeeping Methods appeared first on Aldaris CPA Group.

Tuesday, 1 August 2017

Most Common Accounting Services Available

What are the Types of Accounting Services?

Accounting has been described as the bloodline of any business. Whether you’re monitoring inventory, recording sales, or checking for inconsistencies, you are already applying basic accounting principles. But of course, professional accountants have been trained to perform the same routines but in a more organized, accurate, and effective way.

That is why when some business owners look at accounting as simple recording and computing, they get surprised by how complex it is watching a professional do it. Accounting’s flexibility allows it to be one of the most adaptable services. It can be applied anywhere between our personal lives up until government finance.

Here are some of the most common types of accounting services available in the market.

Major Types of Accounting Services

Public Accounting

Accountants who are not exclusively tied to a single company are the ones that perform Public accounting. Some of the processes involved in public accounting are preparation, review, and audit of financial statements, tax preparation, and consultation or advisory services.

This type of service is often performed by Certified Public Accountants (CPA). CPAs often undergo rigorous training before they take examinations required to get them accredited. (1)

Management Accounting

Management accounting is a process wherein accounting professionals analyze past and present accounting data to synthesize an effective and efficient business model for their client. Some of the processes under management accounting include budgeting, asset management, cost management, and performance evaluation.

Management accounting is also known as advisory services. Its primary function is to improve the client’s use of its capabilities and resources to achieve the objectives of the organization. In short, it aims to help internal users analyze management problems or opportunities. (2)

Governmental Accounting

The largest finance body in any country is the government itself. That is why it should be no surprise that particular types of accounting services are formulated to cater to its needs. Accounting bodies created government accounting to tackle specific issues present in the government that is not in businesses.

The main objective of this service is to help government sectors properly budget and allocate their resources, making sure that each decision is in consonance to both local and national law. Hence, this type of service is one of the most flexible due to varying laws per locality.

Internal Auditing

Large companies often have issues assuring the accuracy and reliability of their financial statements. It is because, as much as we want it to be otherwise, there is always the possibility of mistakes, or worse fraud occurring in the preparation of financial statements.

Internal auditing aims to detect possible departures from set accounting standards. Managers of often employ this service at the end of financial cycles. This type of service does not involve the preparation of services since the responsibility of auditors is limited to giving opinions regarding the reliability and accuracy of financial statements. (3)

Other Types of Accounting Services

Bookkeeping

Accountants consider bookkeeping as one of the most basic accounting services. It is often the first step in the preparation of financial statement since it involves the recording of business transactions of the entity.

Many small and medium enterprises make use of this service since it is significantly cheaper and simpler in comparison to other services. You can check out Aldaris’ bookkeeping services here.

Tax Accounting

Tax accounting is a service focused primarily on the business’s tax liabilities or claims. It is another accounting service that is heavily affected by local and national codes.

A country’s Internal Revenue Code determines how an accountant applies tax accounting to a company. Tax accountants aim to minimize a business’s tax liability without violating any laws or accounting standards. (4)

Forensic Accounting

Forensic accounting can be compared to auditing; however, its main focus is to detect malicious fraud. Forensic accountants are required to have an in depth knowledge of laws that could help them determine violations by concerned parties. Law enforcement agents often use this service when investigating financial related crimes.

External Auditing

External auditing follows the same processes of internal auditing. The difference lies with who uses the audit opinion created. Whereas internal audit opinions are used by internal users such as managers or board of directors, external audit opinions are used by external users such as investors. (3)

The financial sector is becoming more complex and fluid. Hence, it is only right that new and more specific services are created. This results in the Accounting field getting wider and wider as time passes by. This is to cater to the changing needs of businesses.

With this said, every manager or business owner must have at least a minimal knowledge of the differences of these services. So that they could choose which accounting service best fits their needs.

The post Most Common Accounting Services Available appeared first on Aldaris CPA Group.