What are the different types of accounting services available to businesses and the public in the UK? Which type should you use?
There are several different services you should be aware of.
The information on each should help you to decide which type to use when you’re looking to fulfil certain tasks within your business. We will cover nine different accounting service types in this article to give you a clearer perspective on each.
1. Account Auditing Services
Account auditing services provide business owners with precise financial information to ensure their company accounts are correct and accurate. Using an accounting service specialising in auditing can bolster your business’s reputation in the eyes of existing or future shareholders.
Many businesses make use of internal auditing to maintain accurate financial records. External auditing services provide something that internal auditing can’t, though. They offer an objective, independent evaluation that will hold more credibility for shareholders.
Compared with internal auditing, outsourced account auditing services provide a different perspective. This enhances a business’s financial reporting. They can also suggest alternative processes to identify any potential problems.
2. Accounts Receivable Services
It’s not always easy to get money out of your customers. A qualified staff member can contact clients for overdue amounts, or there are accounting firms offering accounts receivable (AR) services. Not only will they be up to the task, but an AR accounting service also includes processing your invoices in a timely fashion.
Accounts receivable services also record financial data in a ledger. The person responsible will add corresponding notes about any outstanding balances. If your business relies on the sale of goods or services, a decent AR service is invaluable to its success.
You will find that the debt collection rate of your company will improve with these accounting services in place. Outstanding payments get received more quickly. These are also captured more efficiently, leaving less room for error. Quicker invoicing turnaround times mean no billing backlogs at month-ends.
3. Bank Reconciliation Services
The object of a bank reconciliation is to match information within a business’s bank statements with corresponding recorded financial transactions in the organisation’s books. Bank reconciliation services cater to this task, which means your financial accounts are accurate
Outsourcing services for your bank reconciliations leaves your business less likely of falling victim to fraud. You’ll also cut down on needless expenses through inadequate banking protocols.
Bank reconciliations can be laborious and time-consuming to undertake. In-house staff without enough experience could end up missing problems. An effective bank reconciliation service means problems found during the process get highlighted and brought to your attention to attend to.
4. Bookkeeping Services
Bookkeeping is a fundamental and necessary process required by all professional organisations. Accurate capturing of financial transactions produces precise financial records. This is a vital cog in the smooth running of any business. Bookkeeping services provide full accounting services, capturing all financial data and keeping accurate financial records.
Bookkeeping services generate financial statements and reports from these records. They track account payments and business income, simplifying financial planning going forward.
These types of services are among the most used in a business environment. SMEs often outsource their bookkeeping needs to accounting firms as they cost less. External bookkeeping services can fulfil the role of two or three full-time staff members to save your firm money.
Larger companies regularly employ permanent bookkeepers to occupy the role. These bookkeepers often deal with other facets of accounting as well. This could mean assisting with payroll processing, accounts receivable and payable, or controlling statutory returns.
5. Chartered Accounting Services
Chartered accountants are well-qualified financial accounting specialists. They carry out many accounting functions, using their vast expertise in tax and management accounting. They’re qualified to undertake compliance auditing, cost accounting, and strategic account management services.
Hiring or employing a chartered accountant isn’t cheap. Compared to other accountants, chartered accountants undergo years of study and training. They pass many exams to earn their job titles. Often they run their own consulting services or are in the employ of major companies.
Chartered accountants have the knowledge and expertise to offer top-class advice. This will aid you in making sound financial decisions. So, if you’re looking for somebody to guide you, or sign off on your annual accounts, a chartered accountant is exactly what you need.
They’ll assess your management accounting needs and ensure the smooth operation of your systems. You need look no further than an expert in chartered accountant services for help.
6. Forensic Accounting Services
If you need forensic accounting services, it invariably means that you suspect you’re a victim of financial crimes. Forensic accountants are management accounting and auditing experts. They’re skilled at investigating and locating missing money amidst financial statements. These forensic services can work closely with law enforcement agencies.
To make the most of a forensic accounting service, you should be entirely open with the investigative accountant on site. If you’ve evaded tax before, or are aware of any prior fraudulent activity, it’s important to make this known to the expert. It helps to provide detailed financial information and divulge any financial problems you’re having.
As already mentioned, forensic accountants may work for law enforcement agents. They can also assist government accounting agencies, often employed by private accounting firms. Hiring a forensic accountant is a good way of getting to the bottom of suspected financial crimes. If a crime has occurred, once solved you will have an expert witness in court too.
7. Payable Accounts Services
Nobody likes parting with money. Having these types of accounting services means you don’t have to deal with your short-term debt personally. The service oversees all these types of financial transactions. Payable accounts services ensure suppliers get paid owed amounts within the stipulated periods.
Accounting firms specialising in accounts payable (AP) improve a business’s payment strategy. They solve expenditure problems, eliminate duplicate payments, and take control of related financial documentation.
Using an outsourced payable accounts service means you’ll likely improve supplier relations without finding payment solutions yourself. It’s a handy alternative to employing staff if your business has a large number of suppliers.
8. Payroll Services
A priority of all business owners is to ensure employees get paid on time. With a payroll accounting service in place, you can accomplish this task more easily. Payroll services set up and maintain the personal and financial data of every employee. They adhere to the correct tax codes and control contractor payments.
A payroll accounting service makes dealing with employee deductions and income tax far easier. It captures relevant financial transactions and carries out wage and salary calculations prior to pay time. Payroll processing services also make generating accurate payslips easier.
Many businesses outsource their payroll services as payroll processing takes a long time to carry out. How much of the process you outsource depends on your business needs.
9. Tax Accounting Services
Tax accounting services assist businesses with tax planning and determine how much income tax and other taxation is due. They also define what deductions are applicable. Tax accountants protect you from paying unnecessary taxes and give you solid advice about tax claims you may have.
Besides the above, outsourced financial tax accounting services prepare and file a business’s tax returns. They can also remedy existing problems on past returns. This type of tax accountant is not limited to tax returns and problems alone, and can even prepare financial statements if requested.
Employing a tax accountant provides a company with opportunities to carry out taxation-targeted internal auditing. Their knowledgeable scrutiny of financial documents is helpful in avoiding penalties from HMRC.
A way to ensure financial stability for your business is to employ or hire people with the correct types of accounting experience to suit your needs. The different services available mean there are experienced professionals out there. They’re ready to cater to your specific needs in all sectors of financial accounting.
What is the Making Tax Digital (MTD) initiative?
Making Tax Digital is an HMRC tax service initiative focused on streamlining the tax system digitally. It means businesses can submit tax returns through compatible accounting software.
How often should I update my financial records?
It’s preferable to update your records monthly. If you need help, use of one of the specialised accounting services available to ensure financial stability for your business.
What are the benefits of outsourcing accounting services?
Outsourcing services have several benefits. These include cost savings and access to expert knowledge and technology. Your business can experience higher levels of efficiency, reduced staff workloads, and accurate financial reporting.
Can a chartered accountant help with business budgeting and forecasting?
Yes, chartered accountants assist with creating budgets and your business’s financial forecasts. They can analyse historical data, industry trends, and market conditions.
This will help you to develop realistic financial projections and to make informed decisions for the future.