Accounting is one of the most important aspects of a business. Having a specialized organization or individual to professionally look at the numbers of your company can not only help you calculate your tax and financial risks but also provide you with valuable insight about your company’s performance and help you keep track of your money. Businesses hire accounting firms exactly for these reasons.
But how many types of accounting firms are there? If you found yourself asking that question, then you are in the right place. We will give you a comprehensive rundown on the types of accounting firms out there and what exactly it is that they do. Let’s get started.
Also, check out: What are Assets and Liabilities in Accounting?
The 8 Types of Accounting Firms
First and foremost, you have the largest type of accounting firm, the coveted full-service accounting firm. These firms are large and specialized enough with enough capital prowess to cover all range of accounting services. These typically have the largest number of staff and are more than then not large international firms.
Audit Firm exactly does what you think they do. They are specialized in auditing. Their auditing services are not only limited to large organizations though. They can very well work with small local firms, government organizations, and even individuals.
Tax firm’s bread and butter are dealing with tax for both corporate entities to individuals. When it comes to firms that are specialized in dealing with taxation accounting, you will find there are more niches and further narrow branches of tax firms. These could include real tax or even high-income tax.
Outsourced Accounting Firms
Outsourced accounting firms are an interesting type of accounting firm that works on behalf of a client and provide and provides them all accounting related services. In other words, these firms act as the client company’s accounting wing. The accountants legally remain the employees of the outsourced firm but will provide accounting services to the client.
The specific services provided can also be broken down too – for instance, some of the services that outsourced accounting firms provide are chief financial officers (CFO) acting on the behalf of the company and even full accounting services.
Don’t forget to check: A Short Guide to Intangible Assets
These guys are risk management specialists. They are responsible for keeping a close eye on where the monetary funds of business come and goes. They can provide internal audits, check if the books are being maintained correctly.
Bookkeeping firms usually work with smaller business which do not have the financial flexibility to work with larger firms. These firms are responsible for maintaining a business’s finances. These tasks are typical fundamental to running the business.
Forensic Accounting Firms
Forensic Accounting Firms are specialized accounting of digging down into a company’s financials and checking for any fraudulent activities. These firms will review all financial statements and even computer systems to uncover any illegal activities such as embezzlement. These firms can also help you set up processes and systems to help alleviate the financial risk that might arise from employees.
These firms are seen to play a consultancy role in their specific specialized area – the areas can range from mergers, insurance, financial planning and more. Consultation can help businesses better understand the market and where the business stands financially and what are the possible best strategies it can adopt.
Q. Should I choose a monthly accountant or less frequent methods of accounting for my business?
Ans. Choosing a monthly accounting generally makes more sense than say annually. Having a professional look over your books after every month provides you with data that is recent and of which you can strategize for the future months to come and the rest of the year.
Q. When do I need to hire an accounting firm?
Ans. If you find yourself at a loss of professionals who are competent in the accounting of your business properly, then that is probably a telltale sign that you need to hire an accounting firm. Also, if your company is getting too big or you have to deal with the government of a specific type of accounting services is needed, hiring an area-specific accounting firm is always advisable.
Q. How do I tell if my business is too big for the firm I am with?
Ans. Business needs to grow, that is one of the most basic desired goals for any business. As businesses grow, all their processes become a more complex and larger scale. If you feel like your current accounting firm is failing to give your competent advice on expansion goals or business plans, filing something incorrectly then it is time to jump the ship.
Q. What does CPA mean?
Ans. CPA is an abbreviation for certified public accountants. They are specializing accountants that need to go through specialized training and test and fulfill comprehensive degree requirements.
Q. Should I Get a CPA?
Ans. Hiring a CPA or even an accounting firm for that matter will solely base on your needs. If you are in the position where you need financial services or assistance like in the case of opening a new business or for doing taxes. It is always a good idea to get help from professionals in these important and crucial aspects.
Q. What are the records I need to keep do my taxes?
Ans. To do your taxes properly you will need a record of all your income, expenses, and other information you report on your tax return. As a good practice, it is advisable you keep your records for at least 7 years.
Dealing with numbers can be a daunting task for some. That is where accounting firm and their specialized services come in handy. If you feel your business needs or even you as an individual need professional accounting services, now you can search for the right type of firm.
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