Different Types of Accounting: Which one is best for your business?

 Accounting firms are a big part of the business world, and they often come in many types.


While some accounting firms work with individuals and small companies, others work with large corporations, helping them keep track of the money coming in and going out.




Accounting firms provide different services to businesses. They can assist in tax preparation, consulting, mergers and acquisitions, and investigative accounting. The types of accounting firms required by a business depend on their accounting and business needs.  What is an Accounting Firm?

Accounting firms are organizations that provide accounting, auditing, and other related services to businesses and individuals. These services can be provided as a stand-alone practice or as part of an integrated professional service. 


Here are types of Accounting Services depending upon your business needs. These include -

  • Public

  • Private

  • Government

Different Types of Accounting 

Financial Accounting

Financial accounting is the process of preparing financial statements to present a comprehensive view of a business or organization. These statements show how well the organization is performing and include metrics such as, revenues, expenditures, assets, liabilities, and profits. Financial accounting standards are used to ensure that companies' bookkeeping methods are consistent with each other and adhere to generally accepted accounting principles (GAAP).

Governmental Accounting

Governmental accounting is the process of tracking government funds and their use. This includes allocating expenses, revenues, and taxes for a stated time, such as a fiscal year.


 The purpose of governmental accounting is to give transparency to the public. It also ensures that governments can pay their present financial obligations and meet future needs.


Public Accounting

Public accounting is a field of accounting that provides assurance and consulting services to different entities within an organization. 


Public accounting often focuses on auditing, tax preparations, tax advisory, and consulting activities. They also provide other services such as bookkeeping, accounting management, and payroll services. 

Tax Accounting

Tax accounting refers to the process of calculating and documenting financial or business transactions that are related to tax or tax returns. It is a type of accounting that involves the preparation of a company’s annual income tax returns from their fiscal-year results.


Tax accounting firms need to be familiar with various rules & regulations that change year to year. Tax accounting is regulated by the Internal Revenue Code (IRS), which is designed to follow current tax laws followed by organizations, non-profit organizations, and individual taxpayers. 

Auditing

The accounting function is responsible for tracking and reporting all financial activity within a business. While auditing involves the review of that financial activity to ensure that it follows acceptable rules and standards. 

A variety of audits may be performed including, -

  • Compliance Auditing

  • Investigative Auditing

  • Financial Auditing

  • Tax Audit

To Wrap Up

As you can see, there are different types of accounting, and it’s crucial to understand the differences between each one. If you need help with getting your accounting in order, we offer a wide range of outsourced bookkeeping services and solutions. Contact us today for more information on how we can help!

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