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Three Key Types Of Accounting for Entrepreneurs

by admin / January 31, 2022


Making money is certainly the most exciting part of being an entrepreneur. But, managing the same is equally daunting. This is where professional
tax accountants in Calgary come into play. You can hire professionals and let them keep an eye on the financial health of your company. 

Not all entrepreneurs or business owners have a bookkeeping or accounting background. And that’s okay. The accountants in Calgary are there to guide you but you too should have a general overview of accounting. 

So, let’s have a look at the three key fields of accounting and what they are all about. 

3 Crucial Areas of Accounting 

It’s a common rumour among people that accountants are restricted to preparing taxes only. The truth is they do a lot more. From auditing businesses to performing a wide slew of accounting tasks, the accountants have a lot on their plates. Here are the main areas of accounting:

 

  • Financial accounting 

 

Unlike management accounting, financial accounting doesn’t look ahead but looks at past performances. Financial accounting is about tracking, recording and reporting financial transactions using financial statements. 

This field of accounting lets you have an accurate look at business performance during a specific period of time in the form of financial statements. Outside stakeholders like financial institutions then receive the completed statements. 

 

  • Management accounting 

 

Businesses all over the world use this type of accounting. It provides the management department of an organization with the essential information required to make high-level decisions for the business. 

Management accounting looks forward. It helps you devise ways to operate more efficiently. The management department also is equipped with the right tools and resources to make sound procedures and policies. There are three types of management accounting- strategic management, performance management and risk management. 

 

  • Public accounting 

 

Service businesses, retailers, manufacturers, governmental organizations, non-profit organizations, etc. are the usual clients of public accounting. This area focuses on tax preparation, auditing, consulting activity and tax advisory. 

The tax accountants in Calgary at public accounting firms may also consult on business, mergers, internal accounting systems and strategies. They may offer financial services like financial consulting, payroll services and accounting management to clients. 

Besides these, the other areas of accounting include cost accounting, forensic accounting, tax accounting and auditing. Each type of accounting has a specific purpose to serve. You can consult with our tax accountants in Calgary to know more about accounting.

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