Posted 1 week ago in Small business
Accountants can be tasked with capturing specific transactions or working with specific sets of information. For this reason, there are several broad groups that most Accountants can be grouped into. Accountants help businesses maintain accurate and timely records of their finances.
Accountants are responsible for maintaining records of a company's day-to-day operations and compiling them in financial statements such as the balance sheet, statement of operations, and statement of cash flows. Accountants also provide other services, such as conducting periodic audits or preparing timely management reports.
You may be wondering why you must find out about the different types of accounting. The best solution is that you may need to use one or several of them in the future. So why not take some minutes and learn about these different areas of accounting?
At a glance: The different types of accounting
Financial accounting refers primarily to the process of compiling information for financial reporting for external reports. Financial accounting is primarily the process of compilation of information for external financial reports.
Financial accountants typically work with revenues and disbursements, including supervising or participating in general ledger accounting, accounts payable, accounts receivable, payroll, grants, and capital assets. A financial accountant will keep an accurate record and report of financial transactions that have already taken place.
This type of accounting record allows for the monitoring and assistance of an organization's financial planning. Their documentation is generally intended for internal stakeholders as opposed to the public. A managerial accountant must exercise caution in disclosing confidential information to whom. Management accountants take an interest in the analysis of past performance in order to forecast future performance.
While Cost Accounting may be considered a sub-category of management accounting, the activities of cost accountants will have an impact on both financial and management accountants. Cost accountants are charged with documenting, presenting, and reviewing manufacturing costs. Although cost accounting may be considered a subcategory of management accounting, the activities of cost accountants will have an impact on financial and management accountants.
Tax accountants help businesses to comply with the Internal Revenue Code when they file their tax documents each year. They also help companies plan their future tax returns, including avoiding certain tax burdens and understanding the implications of specific tax decisions.
Accounting Information Systems (AIS) are the systems through which a business collects, stores and processes its financial and accounting data. Many AIS is now built to integrate with other departments such as connecting the hiring process with Human Resources and the payroll function of a newly hired employee.
Forensic accounting is used to examine the financial files of individuals or companies. It can require accountants to recreate financial information when some information is missing or not available for review. The purpose of forensic accounting is to bring together all available documentation and to fully and accurately account for all transactions in the financial statements.
Public accounting refers to companies that provide accounting advice to clients as appropriate to their needs. They can work in auditing, assist with tax returns, consult about procedures suitable for installing technology or computer programs and provide legal advice.
Government accountants manage financial planning and allocating of resources to departments within a local, state, or federal government. This type of accounting includes standards that have to comply with the Government Accounting Standards Board (GASB), which is responsible for developing uniform accounting procedures for local and state administrations.