As a small or medium business owner, you’re bound to bump into accountants during your business journey.
But are you aware of the different types of accounting these accountants practice? And do you know which forms of accounting your business needs? The guide below should help you to answer both these questions.
Forensic or Auditing Accountant
Forensic or auditing accounting involves conducting an accounting review or “double-check” for the courts or another statutory body. Forensic accountants provide a standardised and impartial third-party review to confirm (or question) the accuracy of a business’s financial reporting. As such, they may be called upon to act as an expert witness in a civil or criminal case that involves a financial element – for instance, in a dispute regarding insurance claims, or a case involving alleged fraud.
At EzyAccounts, we don’t do forensic accounting. Instead, we focus on other areas that are more relevant to the majority of business owners.
The vast majority of accountants with whom a small business owner is likely to come into contact with focus on tax accounting. As its name suggests, tax accounting is accounting for tax-related purposes. Tax accountants prepare financial statements and help businesses file tax returns. They may also help your business with tax planning.
Tax accounting is a compliance expense, as it’s an expense you incur in order to be compliant with the ATO. At EzyAccounts, we can help you with tax accounting for your business. However, unlike most accounting and bookkeeping companies, tax compliance is not our main focus.
Financial accounting involves producing financial statements for external use, such as for shareholders, creditors, customers, and regulatory bodies. These statements report on your business’s past financial performance and current financial position, and are measured against GAAP standards (Generally Accepted Accounting Principles).
Financial accounting is one important service we offer at EzyAccounts. It provides an indication of where your business is at in a financial sense, and is important for all businesses.
Unlike tax or forensic accounting, management accounting is a business investment, not a compliance expense. Management accounting is concerned with providing financial information and analyses to business managers (or whoever is responsible for directing and controlling the business). These reports are more detailed than those produced by a financial accountant, as they are designed to help your business grow and improve. Management accounting may include reports such as budgets and forecasts, analyses of past performances, and other information that will allow your business to plan for the future.
EzyAccounts offers specialist management accounting services to small and medium businesses. Our bookkeepers and accountants are trained to offer business advice based on expert and careful analysis of your business’s numbers. This means that we can help you to make your business more profitable and efficient.
Forensic, tax, financial, and management accounting are all important, as each fulfils a specific and vital purpose.
If you would like to learn more about these different branches of accounting, we would be happy to answer any specific questions you may have. Call EzyAccounts today on 1300 313 397.