Accounting is a broad term because it involves several different types and specialisms. As an individual or a business, there are many instances where you may require the services of an accounting team. To gain a deeper understanding, let’s consider some of the main areas of accounting.
1 . Financial Accounting
Financial accounting refers to categorising and recording transactions on behalf of a business. The process usually includes generating statements using these transactions. Financial documents such as income statements and balance sheets need to be prepared to adhere to the GAAP. The acronym stands for ‘Generally Accepted Accounting Practice.’ According to Investopedia, ‘The establishment of these accounting principles is to provide consistent information to investors, creditors, regulators, and tax authorities.’
2 . Tax Accounting
Tax accounting includes preparing for tax returns and adhering to tax deadlines. Tax accounting must meet the rules and regulations of HMRC. With the help of tax accounting, businesses can calculate income tax. Tax accounting can be used to assess tax-based company decisions, or help companies to legally reduce their taxes.
Businesses and individuals who need support with tax accounting can seek the help of an accounting firm. Our accountants Glasgow can help businesses with their accounts preparation, including tax compliance. AM Plus Accountancy can also support individuals with their Self Assessments. It’s important that both businesses and individuals comply with tax regulations, to avoid penalties.
Auditing is both an internal and an external accounting process. External auditing is when a third party assesses the financial records of a company. The idea is to ensure that they comply with the law, and with the GAAP.
Internal auditing assesses how a company undertakes their accounting duties. The goal is to analyse the policies in place, and see which people are authorized to carry out accounting tasks. Internal auditing is used to identify areas of weakness, or look for examples of mismanagement.
To prepare for an audit, individuals and businesses may need the support of an accounting firm. Our accountants Glasgow, can support both companies and individuals with their bookkeeping.
4. Management Accounting
Management accounting is used to provide insightful data for company managers. The idea to produce info that helps managers to make better financial decisions. There’s a focus on forecasting, budgeting and financial analysis. Our accountants Glasglow can support businesses with their accounts preparation. With accountants preparation services your business can gain valuable data to improve your financial health.
Management accounting is different to financial accounting because the idea is to support managers specifically. Financial accounting is completed for the benefit of third parties. Regardless, it’s a vital accounting area for businesses. Management accounting can help businesses to improve their budgeting and stay in control of their expenses.
To learn more about the main areas of accounting, and how we can help, contact AM Plus Accountants today. We offer a range of accounting services from payroll to tax support and VAT compliance.