Accounting services can help your business stay on track with payments, invoices, bookkeeping, and payroll. Professionals can provide advice to small businesses on the right investments and best structure for their business to ensure financial stability. It is crucial for business owners to know which types of accounting services are available for their business.
10 Main Types of Accounting Services
- Bookkeeping Services
- Accounts Payable
- Accounts Receivable
- Payroll Processing
- Bank Reconciliation
- Tax Accounting
- Chartered Accounting
- Auditing Services
- Fractional CFO Service
- Forensic Accounting
1. Bookkeeping Services
Bookkeeping is the process of recording financial transactions and is a vital part of any business. Without accurate and up-to-date bookkeeping, it would be very difficult to run a successful business. Bookkeeping services not only provide a record of all financial transactions, but can also be used to track spending, monitor income, and prepare financial statements.
Related: Best Virtual Bookkeeping Services
2. Accounts Payable
Accounts payable (A/P) is the money that a company owes to its suppliers. When a company orders goods from a supplier, it usually pays for them within 30 days. This means that the company has to keep track of how much money it owes to each supplier. Many accounting services handle AP for their clients.
3. Accounts Receivable
Accounts receivable (A/R) are funds that are owed to a company by its customers. This amount is typically recorded on the company’s balance sheet as an asset. In order to keep track of accounts receivable, companies will typically set up an accounts receivable ledger. This ledger will contain all of the pertinent information regarding each customer’s outstanding balance.
Companies typically send out invoices to their customers on a monthly basis. These invoices will list all of the products or services that the customer has purchased from the company, as well as the corresponding amount owed. Once the customer pays the invoice in full, the company will record the payment on the ledger and the account will be considered settled.
4. Payroll Processing
Payroll processing is the process of calculating employee wages and withholding taxes and benefits. Payroll processors use payroll software to generate pay stubs and calculate payroll taxes. Payroll processing is a complex and time-consuming task, so many businesses outsource this function to payroll service providers.
Related: Best Small Business Payroll Service Providers
5. Bank Reconciliation
Bank reconciliation is the process of matching the balances in an organization’s accounting records with the corresponding information from the bank statements. This process is important in order to ensure the accuracy of the organization’s financial records.
Bank reconciliation can be a complex and time-consuming task, but it is essential in order to maintain accurate financial records.
6. Tax Accounting
A tax accountant is responsible for ensuring the company pays the correct amount of tax, and provides advice on how to minimize the amount of tax the company pays. They may also help with preparing and filing tax returns.
7. Chartered Accounting (CPA)
Chartered accountants are professional accountants certified by a professional body. They are usually employed by accounting firms, but can also work independently. CPAs provide a wide range of services, including auditing, tax advice, and financial planning.
8. Auditing Services
There are many different types of accounting auditing services available to businesses and organizations. These services can provide an independent, objective evaluation of an organization’s financial statements and their compliance with generally accepted accounting principles.
Audits can help businesses and organizations identify potential problems and make necessary changes to improve their financial reporting.
9. Fractional CFO Service
A fractional CFO is a top-level financial executive who is hired on a part-time or interim basis to provide strategic and financial guidance to businesses. Fractional CFOs are usually brought in during periods of transition or growth, and their main focus is to help businesses make sound financial decisions that will improve their long-term prospects.
While a fractional CFO does not have the same day-to-day responsibilities as a full-time CFO, they are still a vital member of a company’s leadership team and play a key role in shaping its future.
10. Forensic Accounting
Forensic accounting is the use of accounting principles and practices to investigate and analyze financial crimes. Forensic accountants use their skills in auditing, investigating, and accounting to detect and prevent fraud. They may work for law enforcement agencies, private accounting firms, or government agencies.
Forensic accountants are also often called upon to testify in court as expert witnesses.
Four Main Types of Accounting
Accounting can be divided into four main types:
- Public Accounting
- Management Accounting
- Internal Auditing
- Government Accounting
Public Accounting
Public accounting firms are businesses that provide attest, tax, and consulting services to their clients. These firms are organized as partnerships, and their partners are responsible for the management of the firm and its practice.
The public accounting profession is regulated by state boards of accountancy, and the partners of public accounting firms must meet the requirements of these boards in order to practice.
Management Accounting
Management accounting is a field of accounting that provides financial information to managers within organizations. This information is used to make decisions about how to allocate resources and manage operations.
Management accounting includes both financial accounting and cost accounting. Financial accounting provides information about the overall financial performance of an organization, while cost accounting provides information about the cost of producing goods and services.
Internal Auditing
Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.
Internal audits provide valuable insights and recommendations that help organizations to make better decisions, improve their operations, and protect their assets.
Government Accounting
Government accounting is the process of recording, classifying, and summarizing financial transactions to provide information that is useful in making decisions about the allocation of resources.
Government accounting is primarily concerned with the financial operations of the government, including the preparation of financial statements, the maintenance of accounting records, and the auditing of transactions.
