accounting guide
07

Sep 2022

What is Accounting?

Accounting is the process of recording the financial transactions of a business. The accounting process includes analysis, reporting & summarizing the transactions of a business. Accounting is one of the key functions for almost any business and is essential irrespective of business size - small or big. An accountant manages it within the company or accounting firms.

The reports generated by an accountant for a business, such as financial accounting, cost accounting, tax accounting, cost accounting and managerial accounting, are crucial in helping business management make informed business decisions.

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Benefits of Accounting?

For an accountant, the accounting process is a back-office role where they do not interact directly with customers, product developers, or manufacturers. However, accounting plays a key role in a company's strategic planning, growth, and compliance requirements. A few of the benefits are here:

  • It helps in measuring the performance of your business
  • It ensures Statutory Compliance
  • It helps in Preparing Budget and Future Projections
  • It helps in Filing Financial Statements
  • It helps in Preventing Financial Crises

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What is Bookkeeping?

Bookkeeping is a process of keeping a record of a company's financial transactions into organized accounts daily. This transaction includes customer receipts, payments to suppliers, disbursement of salaries to employees and much more.

Bookkeepers are a company's responsible resource for bookkeeping, who help maintain an accurate book of account and manage tax preparation and all the accounting needs.

Bookkeeping services are not only about recording your accounts payable and receivable but also ensuring the success and security of your business through accurate accounts management.

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Outsourcing Accounting & Bookkeeping

Hiring a third-party firm or individual for a company’s or business’s accounting and bookkeeping instead of hiring employees within the company is known as outsourcing accounting & bookkeeping. Some of the benefits of outsourcing these services are:

  • Cost-effective
  • Scalability
  • Saves time
  • Enhanced data protection
  • Reduced errors
  • You will get expert accountants & bookkeepers

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What is Forensic Accounting?

Forensic accounting is the investigation of fraud or financial manipulation, detailed investigations and analysis of financial information. Forensic accountants are hired to prepare for litigation related to accounting fraud, skimming and any type of financial theft.

Forensic accountants are trained to look beyond the numbers and deal with the reality of a business situation. Forensic accounting is frequently used in fraud and theft cases to explain the nature of a financial crime in court.

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What is Accounting Diversity?

Accounting Diversity refers to differences in the recording and using of financial information between countries. While many businesses deal with the volatility without curtailing business operations, the problems affect core business transactions, including valuing the company's net worth and managing the business under Generally Accepted Accounting Principles and Standards.

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What are Accounting Standards?

An accounting standard is a guiding set of rules that determines the policies and practices of financial accounting. Accounting standards facilitate financial accountability while improving the transparency of financial reporting.

In the United States, the Generally Accepted Accounting Principles (GAAP) form the set of accounting standards widely accepted for preparing financial statements, improving the transparency of financial reporting in all countries.

Non-US GAAP Companies follow the International Financial Reporting Standards (IFRS). These guidelines are set by the International Accounting Standards Board and serve as the guideline for companies reporting financial statements.

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Accounting & Bookkeeping Services

In any organization, accounting and bookkeeping duties are one of the main responsibilities. While bookkeeping ensures that financial transactions are accurately recorded, accounting classifies, analyzes, and interprets the data. These activities help maintain the financial health of an organization, which is why experienced professionals are needed to perform these tasks.

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More Accounting Terms