Proper management of business finances reflects a lot on a business’s overall performance. This way, companies have the mandate to ensure their financial statements always go right. One way on this is strict adherence to the set accounting rules by the Securities and Exchange Commission (SEC). This goes hand-in-hand with the following of the Generally Accepted Accounting Principles (GAAP).
Rules by SEC requires public companies or businesses to hire external accounting firms to handle their financial statement audits. Quickbook online and the rest of the bookkeeping procedures; however, a quality audit would only come from such firms. Their specialized services extend in other financial errands such as;
- Tax accounting
- Management consulting
- Mergers and acquisitions
- Forensic accounting
Because of their extensive task coverage, different firms offer only specific services. The one you invite over to your business, therefore, must be dealing with the accounting type you have. Also, they must understand your business needs.
Currently, when we talk of accounting firms, we mainly consider the BIG 4. The term is a nickname for the top best company known to offer a wide range of excellent accounting services. These companies are Deloitte, KPMG, Ernst & Young, and PricewaterhouseCoopers. All of them work as professional service networks extending their highly adorable services to over 500 Fortune companies.
Types of Accounting Firms
Here are the four main types of accounting firms.
For tax, audit, and management consulting, public accounting firms hire Certified Public Accountants to assist. The Big 4 accounting firms play a significant role in this, serving both big and small public business companies. All their accounting services go by the SEC rules and strictly follow the Generally Accepted Accounting Principles.
Accounting firms dealing with this prepare and plan tax information. Mostly, it is CPAs hired for these tasks, and they always have to adhere to the Internal Revenue Code establishes tax laws. The laws are different from those of the GAAP and keep on changing. Hence most CPAs urge their employees to keep an update of the tax planning strategies and accounting software such as the Quickbook online.
Firms dealing in forensic accounting apply special accounting skills in uncovering fraudulent and illegal financial activities. Be it public or private; all companies can hire a forensic accounting firm to investigate their financial records. Mostly, these firms work with the law enforcement team to ensure the security of any evidence on embezzlement, money laundering, identity theft, and stock price manipulation.
Bookkeeping firms helps small and medium business services complete their fundamental accounting tasks. They compose of only a few numbers of employees. Many businesses outsource bookkeeping services which mainly comprise of the following.
- Accounts payable
- Credit sales reconciliation
- Bank reconciliation
- Preparation of the financial statements
- Accounts receivable
- Accounting write-ups preparation.
Accounting in business helps solve the mysteries on how to run a business better. When your business grows, handling everything by yourself may be challenging if you lack professional skills. Accounting firms, therefore, have a more significant role in serving in all business industries.