Accountancy or accounting is the method of determining, recording, analyzing, and communicating financial and non-financial data about non-financial entities like businesses and individuals. Accounting has two main elements: internal bookkeeping and external bookkeeping. Internal bookkeeping includes all activities performed by an accounting department, while external bookkeeping involves the transfer of financial data between external parties. These two types of bookkeeping are quite similar and it depends on how you choose to carry out your accounting activities that will ultimately determine which type of accounting you should go for.
The first thing to consider is to decide whether you would prefer to do accounting manually or automatically generated financial reports. Manual accounts have been used for a long time and there are many benefits of having one. For one, manual accounting is very simple since all the data is recorded in a way that can be easily read and understood. When using manual accounts, there is no need to hire the services of professional accountants. The only thing you need to ensure is that you can follow the instructions given by your accountant.
There are two kinds of manual accounts: accountants and bookkeepers. Accountants use different types of equipment to generate the financial reports. In order to determine the appropriate type of accounting equipment you should consider the following factors:
o The cost of accounting software. If you have to hire the services of a professional bookkeeper then the cost of hiring the professional would be more.
o If you are planning to write or publish your financial statements, make sure that the statements have accurate data. Make sure that the numbers do not add up. Also, it would be better to have the data ready so that you don’t end up with errors. This is especially important if you have used manual accounts.
o If you are planning to hire an accountant or bookkeeper then make sure that you know the type of accounting account that they would do. There are accounting types like business and financial accounting and public accounting which would require different types of equipment. If you plan to use one account that is common in accounting, then make sure that they are familiar with all the accounting types.
o If you are planning to hire a bookkeeper, then make sure that they are familiar with the types of accounting that they will be doing. They should also be able to understand all the technical terms used in accounting. This way, if you encounter any problems during the process then they will not have to spend much time explaining them to you.
o If you are hiring accountants, make sure that they are well aware of the latest techniques of accounting. You can also ask them how they get their accounts prepared. Asking them for such information may be a bit tricky but you need to be very careful when answering such questions because they may be able to give you some useful information.