Relevance and Roles of Business Accountants

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Running a business is not easy as it seems. On the outside, it may look like you are doing a really good job keeping your company together, but your internal operations may be chaotic. One will realize that accounting truly is a big piece of work, especially when it comes to the accounting of the expenses and earnings of a company,

One of the salient processes in running a business lies in its accounting functions. Since businesses operate with money on a daily basis, the flow and movement of the company’s finances should be well-regulated. A business without an accountant or a group of accountants is anything but organized. You can expect that the business will not only spiral down in no time, but the responsibility and integrity of its fund utilization will clearly hang in the balance. This goes for both small and large businesses. Whether you are comfortable having an actual accountant managing and recording your finances or you want computer software to run everything for you, the fact remains that it is a necessary aspect of your business.

Financial Accounting Course – Bank Reconciliation

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Financial accounting has different topics and one of them is Bank Reconciliation and its preparation. In this article you will explore this concept and find some examples which can be appear while reconciling cash book and bank statement in practice. Such exercises is done on a monthly basis, therefore is quite important.

Concepts

Considering the concept of Bank Reconciliation, it relates to the end of the accounting period, when we need to compare Cash Book and Bank Statement balances and clarify differences between these two balances. In practice it is a very rare case when these two balances are be equal, therefore reconciliation process is important and to be done at the end of each month.

During the Bank Reconciliation process we will need to identify types of the differences and decide whether adjustments to the cash accounting records are needed or not. Necessity to make such adjustments depends on the type of difference, i.e.:

 

  • Informational difference - it represents information which is included into the Bank Statement, but not reflected in the cash accounting records.
  • Timing difference - it is caused by different timing in recording items in the Cash Book and Bank Statement. No adjustments are made and these items are only explained in the Bank Reconciliation.

 

Examples

As mentioned difference between cash balance in the accounting book and balance in the statement from bank might be caused by certain items, which are not included into the cash accounting records during the accounting period, but need to be included.

The examples can be:

 

  • mistakes – items erroneously committed,
  • payments made directly to the bank account,
  • payments made directly from the bank account,
  • bank charges.

 

All these items have to be included into the Cash Book before preparing bank reconciliation. Therefore we start from the unadjusted Cash Book balance and record adjustments. Only adjusted balances goes to the Reconciliation.

Afterwards we proceed with timing differences. The examples are checks recorded in the cash book, but not yet presented to the bank at the end of the accounting period or checks proceeded by the bank, but not yet recorded in the cash accounting records.

To make a reconciliation between the accounting records and bank statement, we proceed further with the adjusted cash book balance, add or deduct timing differences and get the final bank statement balance. All the reasons for timing differences have to be explained in this process.

Reconciling the bank statement is of course costly and time consuming task, however no business organization can neglect it. To get clear idea about bank reconciliation statement please visit us at accountantmelbourneco.com.au.

Accounting Services – 3 Tips On Finding The Right Accountant

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Finding the right accountant can be tough with so much fraudulent activity that is going on online these days. It is hard to find a trustworthy accountant, especially while looking online. If you are searching on Google, it can be even harder with the 1,000′s of search results that come up when you perform a search for accounting services. Just because someone is in the number one spot does not necessarily mean they will be the perfect accountant for you. There are multiple factors that go into finding an accountant depending on your individual or business needs. Here are a couple ways that you can filter out the results by just doing a little bit of research.

Pricing

The pricing structure of a company might be different from the pricing of someone who works out of their home office. Most companies will have accounting services for individuals or businesses. A lot, of home bases accountants usually focus on individuals but can handle small businesses as well. You will save more money if you can find a trustworthy accountant that is working from their home office. The only downfall of hiring someone that works from home is that they have no supervisor. They are in charge of your account and no one else will be able to check if they are working ethically. The great thing about hiring a company is that you can have the security that they are going to do a great job and there work will be checked over by a supervisor.

Experience

Hiring an inexperienced accountant can be a real nightmare when tax season comes around. If your books are off, it might be tougher to prepare your taxes and could end up in the whole or losing money. Make sure the person or company you choose to hire has at least 10 years of experience. 10 years in business, shows a lot about a company or business owner and that they are in it for the long run.

References

Does this company or individual have references? If so, check them. You want to make sure that the person or company you are dealing with is reputable and that they aren’t just trying to get your money. If they have more than one reference, I would suggest checking them all. It’s too easy these days to get a friend of yours to answer the phone for you and act like a potential client. Maybe, do a couple reputation searches online or check the BBB website as well.

Don’t just hire any accountant, make sure you do your research and find the best one for your business size and one that has a healthy reputation in the industry. Price should be last on your list if you are looking for a trustworthy person to handle your money.