Often, accounting for entrepreneurs is a mysterious area with many risks. Although the law in some jurisdictions exempts companies from accounting, all companies are required to record business transactions and prepare primary documentation for tax reporting. Incorrect entry of accounting data, late reporting, and other errors can lead to debt obligations and fines and paralyze the company’s activities.
Our company offers highly qualified specialized services for the establishment, licensing, and further support of businesses. We provide an extensive range of services, including maintaining and organizing accounting.
Introduction to Organizing Accounting Services for Businesses
Submitting reports within strictly established deadlines is very important for businesses of any scale and level of commercial influence. If reporting is not submitted and there are no movements in the bank account, according to the law on state registration, the legal entity is considered inactive and can easily be excluded from the register. The founders or members of the organization may be accused of a terrible fiscal violation – the absence of a tax return. If the entrepreneur does not report to the income inspectorate, he/she will have to pay insurance premiums or suffer another type of punishment established individually in each jurisdiction.
First of all, it is necessary to distinguish between accounting and reporting since these concepts are different but closely related to each other because the continuous collection and constant entry of generalized data about the organization into special accounting documents form this very reporting for the tax authorities. Errors in accounting can lead to distorted reporting. Otherwise, the opposite may happen; incorrect reporting will spoil correct accounting. That is why it is extremely important to identify such unacceptable errors in a timely manner, for which business owners should not launch their accounting departments and conduct a thorough check of documents periodically.
However, tax accounting differs from accounting primarily in that it is essentially a subtype of the second, which is more thorough in calculations. Accounting service efficiency in business activities helps to determine the results of not only the financial but also the economic activities of the organization; for this purpose, extremely accurate accounting reports are prepared. Tax accounting is needed to determine the tax base in monetary terms of taxable income.
In-house vs. Outsourced Accounting
Accounting services are necessary for businesses for many reasons.
- First, they help companies manage their finances properly and reduce risks.
- Accountants can help companies control their expenses, improve their profitability and avoid tax penalties.
- Secondly, accounting services help companies maintain their reputation and attractiveness to investors. Reliable financial accounting is an important factor in attracting investors and financial partners.
Effective accounting systems allow companies to focus on their core business processes without being distracted by financial issues. Instead of spending time processing accounting information, companies can focus on developing their products and services, improving the customer experience, and increasing profitability.
There are many accounting services that can help a business succeed. Here are some of them.
- Bookkeeping: it involves keeping records of all the financial transactions of a company, such as income, expenses, assets, and liabilities.
- Financial reporting: it involves preparing balance sheets, income statements, and statements of changes in equity and cash flows.
- Tax planning: it involves optimizing tax payments and avoiding tax penalties.
- Accounts payable and receivable management: This involves recording and managing debts and receivables, including timely payments and debt collection.
- Financial analysis: it involves analyzing a company’s financial data to determine its financial position and develop strategies to improve its profitability.
Technology in accounting services gives possibilities to complete different operations in online mode and via automatized systems calculating data with specially programmed schemes.
In what cases are outsourcing accounting solutions necessary for any category of business?
- You or your accountant do not have enough resources to solve accounting problems or do not have time to keep up with rapidly changing legislation.
- You want to save on maintaining your personal accounting.
- You want to spend more on the development of your business and not on the operational organization and routine associated with running a business.
- You want to protect yourself from the risks of working with an incoming accountant.
- You don’t want to constantly monitor your accountant.
- You have just become an entrepreneur and don’t know where to start with accounting and taxes.
- Difficulties and questions arise regarding the preparation of primary documentation, settlements with counterparties, reconciliations, and other operational activities.
- You need verification and optimization of accounting and taxation.
- You want to put your accounting in order, save yourself from problems with taxes, and protect yourself from additional risks borne by inspection authorities.
For many entrepreneurs, it is more profitable not to have a personal accountant on staff but to contact a specialized firm providing accounting services. Typically, an accounting company consists of several highly qualified specialists who can work in different areas and areas of accounting.
According to compliance in accounting, when drawing up a business plan for the provision of accounting services, it is important to take into account the situation on the market for such services in your city or region. This is necessary to determine competitive prices for accounting services. The greater the competition, the more carefully it is necessary to think through the company’s business plan. It is necessary to set prices for accounting services that will compare favorably with similar offers from your competitors, with the best conditions for performing work and quality guarantees.
Key Considerations in Setting up Business Accounting
Accounting services for any category of business are not only calculations and reports. Every company must comply with the rules for creating accounting, but not all beginning entrepreneurs are ready to hire an accountant as a salary. They usually use standard documents and do not know that an experienced specialist can quickly improve a working chart of accounts, primary forms, and methods for assessing assets and liabilities.
We’re ready to mention some accounting service tips for businesses. For proper organization of accounting entrepreneurs need the next-mentioned.
- This is the primary task when creating a business, and much will depend on certain indicators:
- Tax system: In some jurisdictions, accounting is much easier under a simplified tax system than under VAT, property taxes, income taxes and other burdensome transactions.
- Business activity: how many transactions and various business operations are carried out during a certain tax period.
- Number of activities.
- Seasonality in business activities: for example, when an agricultural company grows and sells products.
- Export-import transactions complicate bookkeeping.
- Number and qualifications of employees on staff: reporting on wages, income, insurance premiums, and other transactions can be quite complex.
Our company offers comprehensive assistance in organizing and maintaining accounting. We have extensive experience and professional qualifications, which help us achieve the best results for our clients. Contact us now.
The article’s author is Denys Chernyshov – founder and CEO of the globally-famous organization Eternity Law International.
