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Choosing the right accountant for your small business or personal finances is one of the most important decisions you can make. A good one can save you time, help your business grow, and increase your net worth. Not only can an Accountant save you a lot of money, they can also save you a lot of effort and headaches. Therefore, seeking advise from a financial professional is smart business.
In the United States, most accounting professionals abide by the Generally Accepted Accounting Principles (GAAP) to offer a company’s economic details to stakeholders outside the firm in a format that everyone can comprehend. There many accounting State and Federal criteria an operating business must comply with during the normal course of business. Accountants process financial transactions, prepare information for governmental entities, and provide finanial advise and reports to firm management. There are several types of Accounting:
The duties of an accountant are to collect financial information, analyze it, and use it to produce financial reports, perform audits, and prepare financial statements (i.e., income tax returns, financial statement, and annual reports). An accountant’s analysis can offer information for projections, service patterns, and profit margins to name a few. They can advise you on managing cash flow. Keep in mind that there is a difference between an accountant and a state-licensed accountant. Although both can perform similar functions, a Certified Public Accountant (CPA) is more knowledgeable about tax codes, can perform higher-level analysis, and can represent you before the IRS if you’re audited.
Accountants and Bookkeepers functions:
Small business owners use an accounting professional outside the firm as an expert advisor. Some local business owners use bookkeeping software recommeded by their accountant. The client will give them their transactions on a weekly, monthly, or quarterly basis for analysis. Other small businesses are big enough to have full-time accounting clerks or a full-time bookkeeper on staff to perform the required tasks.
If you decide to hire an accountant or bookkeeper, here are a few tips on finding the right one: Check references and previous experience Make sure the candidate is educated in accounting software and technology Make sure the candidate is fluent in accounting policies and procedures Test that the candidate can clearly communicate financial lingo in words you understand. Also, make sure your accountnat is sociable. Small business owners and entrepreneurs typically outsource accounting and bookkeeping services.
For businesses, however, tax obligation collection agencies, regulatory authorities and various other oversight firms expect to see comprehensive and proper audit documents. If your organization ever seeks equity capital or loans, financial institutions will review your audit documents and financial statements. Financial transactions almost always fail because of accounting problems or errors. To avoid financial and tax problems, your company will need to get the help of an accountant.