The most important aspect of any big or small business is its finances. Finance is based upon and is aimed towards its finances and this is what should be given most important. The factor of accuracy is highly important in managing the accounts of a business. So, business owners look for professional accountancy services so that the task of accounting could be made flawless.
Due to diversity in the different business fields where the accountancy services are needed, different specialized accountancy services are developed for them. The purpose of this exclusivity is to propound an ultimate perfection in the matter of accountancy. For each step of accounting, an expert on that specific step will be hired.
Difference between bookkeeping and accounting
First of all, this misunderstanding between bookkeeping and accounting should be cleared. Many people think that keeping the record of accounts in accountancy. But in reality, that is bookkeeping and it is just one step in the whole big process of accountancy. Accountancy is much more than that. Bookkeeping has a very limited scope inside the whole accountancy process.
Accountancy involves analyzing, summarizing, calculating, communicating and planning the finances of a business. All of these steps are separately widely explorable. While bookkeeping is to just keep the record of finances in a sound manner. However, bookkeeping is also not an insignificant process. The accuracy of the whole accountancy process is based on the authenticity of bookkeeping.
The main different services which are provided by accountancy service providers are;
- Financial Accounting
- Cost Accounting
- Managerial Accounting
- Tax Accounting
- Public Accounting
Financial accounting deals with recording and organizing all the business transactions of a firm. Moreover, it also prepares a financial statement which can be utilized by anyone who needs the proper records of the finances of that business.
Cost accounting involves the process in which the manufacturing costs of a business are calculated, analyzed and presented.
Cost accounting is the most crucial accountancy service in the business where product manufacturing has a say. Cost accounting gives a clear picture of the further planning of the manufacturing business too.
As the name says, this accounting service includes the process of financial management. This includes planning, forecasting, budgeting and nonsystematic or systematic evaluation of financial decisions, etc.
Managerial accounting does not involve strict systems rather it works in a way in which the focus is centered on the benefits and good future of the company. So, whatsoever way it works, the finances will be managed according to that.
In the process of tax accounting, the client is assisted in making financial policies and decisions according to the tax policies. The financial planning will be done by keeping the room for tax payment and also to minimize the tax payment.
There are basically two types of auditing in business.
In this type of auditing, the company’s internal financial structure is analyzed in every way and its authenticity is tested by the management of the company itself.
In this type of auditing, a third party is hired which is independent in its position to analyze and scrutinize the transparency in the financial matters of the company. Businesses hire external auditors to have a foolproof and unbiased financial examination of the company.
These are some of the layers of accountancy. Business owners in Croydon look forward to hiring professionals of accounting as their employees. However, even if they have full-time employees to handle the matters of accounts still, every now and then, a Public Accountancy service is hired to double-check and have an even deeper insight into the accounts.
Chartered accounts and other professional accountants are hired by the firm so that they can independently and unbiasedly investigate and plan the finances of the firm. We all know that finances are the reason behind the working of any business. Business is all about spending and earning more finances. Any mistake in the matters of accounting can lead to some serious business mistakes which are totally unbearable at any cost. So, it is important that you pay great heed to the accounting of your business and ensure its perfection.