When we ask ourselves that question, the answer is quite simple, at the end everything resolves around money. Accounting manages all transaction within the company and records it. It monitors the profit or the loss and help the company to become more productive and profitable...Read More
Once you’ve decided to become an accountant, it can sometimes seem like the road ahead is impossibly long. 150 hours of educational classes, CPA tests, and so much more are between you and your goal. It may seem like years down the line, but if you follow these few simple steps, you’ll be there before you know it!
Step 1: Decide You Want to Do It
See, you’ve already got one of the steps down! The first step to achieving anything is deciding that you want to do it. No matter what made you decide to become an accountant, or where you are in life right now, deciding to do it is the first step down the path to accountancy!
Step 2: Study, Study, Study
This next part is where you need to put your nose to the grindstone. You will need to get a fair amount of education under your belt. In most places, the requirement is a minimum of 150 hours of post-secondary education in the field. While a Master’s degree is not a requirement for becoming an accountant, you may find that, since you’re enrolled in the classes anyway, it make sense for you to go ahead and go for it. Many people feel that with that much education, they want something concrete to show for it. Once you’ve finished the educational requirements, you’ll also need to prepare for the CPA exam. You may opt to study for this on your own or enrol in a preparatory course designed specifically for the CPA exam.
Step 3: Decide What Type of Accounting You’d Like to Do
While there are many different types of accountants, they pretty much fall into these four broad categories:
Most accountants are public accountants. This category includes things like bookkeepers, consultants, and tax advisors. Management accountants are involved in the internal planning of companies. Government accountants, of course, work for government agencies, including the IRS. Internal auditors are employed by companies to make sure that everything within their company is running smoothly and within all legal perimeters.
Step 4: Brush Up On Your Computer Skills
In the modern business world, computer skills are more important than ever before, and even more so for accounting professionals. Make sure to familiarise yourself with all major accounting software to make yourself more valuable to potential employers.Read More
Business owners have a lot on their plate. Between juggling their employees schedules and trying to grow a new company, it’s understandable that some things get swept under the rug. One area any business owner can never afford to make mistakes, however, is in the accounting department. A simple mistake there could spell financial ruin for the whole company. But it’s not all doom and gloom! I’m going to tell you about some of the most common accounting errors business owners make- and teach you how to avoid them.
Struggling with Complicated Accounting Software
I’m not going to lie to you, some of the accounting software out there is downright confusing, even for me. A lot of it seems to be overly complicated, especially for a small business owner without a solid background in accounting. It’s important to choose an accounting software that meets your company’s needs and is easy to use. You’ll want to invest the time at the beginning to learn how to use the software fully so that you don’t discover later you’ve been entering things incorrectly or missing out on powerful functionality. One program that comes highly recommended for its user friendliness is FreshBooks.
Falling Behind on Entries
Many times, this is a symptom of the first problem, since it’s easy to avoid using software that confuses you. However, in other cases it may be due to neglect or improper time management. Even when it seems like there aren’t enough hours in a day, which it often can for a business owner, it’s important to carve out time to make entries and reconciliations in the book. If you don’t commit to this regular schedule, you may soon find that you’ve gone months without making any new entries and are now working off of inaccurate financial reports. That’s no way to make sound business decisions. My recommendation is to pick a day, any day, and when you come into the office on that day, make it your mission to get current on the books, first thing. Make it a habit and you’ll be in a much better position with minimal effort.
Mixing Business and Personal…Finances
This is a big no no, but you may be surprised at just how often it happens. Keeping separate accounts for your business expenses and your personal expenses can help you get a better look at both. Seeing clearly how much money goes in and out of your business can give you the information necessary to make the best business decisions, whether that be adjusting expenses or settling on a solid amount to reinvest into growing your business.
Getting Rid of Receipts
Just like your mother always told you, you need to keep receipts. This doesn’t have to mean rows and rows of filing cabinets, though. Keep your physical receipts for business purchases just long enough to digitise them and add them to your official accounting records. These receipts can help you manage your deductions at tax time and protect you in the case of an audit, so hold on to them for at least 3 years.
Hiring the Wrong Accountant
Unfortunately, this is a mistake that can cause a huge amount of damage, but can be difficult to detect until it’s too late. To protect yourself as best you can, make sure first that you’re hiring a qualified professional with all necessary certifications. Conduct interviews with any potential hires to make sure they fit well into your company and speak with their former clients if possible to get a feel for their past work.Read More
When we ask ourselves that question, the answer is quite simple, at the end everything resolves around money. Accounting manages all transaction within the company and records it. It monitors the profit or the loss and help the company to become more productive and profitable because it has all information required for the business. Good accounting team will only increase the productivity of the company and it will reduce the cost without jeopardizing its wellbeing.
There are two types of accounting: “cash basis” and “accrual”. Small companies usually use the first method and it is referred to a physical movement of the cash between two parties. For example: when one party buys some good on credit card in April and pays it in September, the accounting will record transaction in September, because the goods were paid in that period and that’s the time when the money left the company.
Accrual method use larger companies and when we compare it on example above, accounting will record the transaction in April even though the bill was paid in September. This method fallows all bills that come into the company and regardless whether they were paid or not, the intension still exists and they are recorded and monitored as “to pay” or “to be paid”.
Try to imagine that you run a company but you don’t know its actual profit, you don’t know your loss or expenses, salaries of your employees, you don’t pay federal, state or city taxes and your inventory doesn’t exist. These types of things accounting regulate and helps company save money instead of losing it on unnecessary matters. Every loss is analyzed in details in order to maintain productivity of the company and every single matter is questioned to determine what brought that loss.
It is important that every single money that enters and goes from the company need to be monitored, recorded and accounted for. When accountants follow up this procedure they can predict future of the company, its growth and its performance. It takes lot of time and patience to understand how the cash flows and how to improve the productivity of the company. Accounting can help you pay your taxes, employees and client on time and it can determine if the money is wasted on a third party, when the business could be done within the company.
How do you track your business performance? Only through reports and tons of the reports. In order to run successful business, you accounting team must include cash flow reports, accounts payable, accounts received, budgets and expense reports. You can use any of these reports and there is no any specific rule that you must use any of them, it all depends on you and your choice how you will run your company.
There are few types of reports that can be beneficial for your company:
Cash flow (you can include here daily, weekly, monthly, quarterly and annually), budget and cash plans, accounts receivable/payable, income statements and balance sheet and stock holdings.