Accounting Solution Hack Now Financial Accounting in Business

Financial Accounting as an Accounting Solution? 

Financial accounting is an accounting solution that undertakes the work of recording, synthesizing data, and building financial statements to serve those who need to use accounting information. Information on the status and fluctuations of capital, assets, or physical and monetary flows will be synthesized by a financial accounting team based on data.

The finance and accounting team will include general accounting and data accounting, with a clear and transparent division of work to ensure work efficiency, specifically:

  • General accounting: Collect and process general information about the economic and financial situation of the unit. Through monetary units, general accounting provides data reflecting the use of assets and sources of asset formation of the enterprise.
  • Detailed accounting: Collect and process information according to a specific object on each unit. In detailed accounting, accountants must ensure accuracy to avoid affecting when resuming the data.

Financial Accounting for Businesses

A financial accountant is one of the positions that play an important role in the business, supporting businesses to perform tasks such as:

  • Provides information for those who need to use accounting information such as business leaders, external partners. Therefore, all financial accounting data provided should ensure accuracy, objectivity, and compliance with accounting principles and standards, which is the basis for managers to make appropriate and timely business decisions.
  • The information provided by a financial accountant is information about financial-accounting activities that have arisen, of a general nature, expressed in the form of value. Therefore, businesses can regularly monitor the status of their production and business activities.
  • Makes general financial statements about the business’ performance results of in the reporting period, including clear financial results and effective cost management that help businesses optimize costs and cut unnecessary expenses.
  • Manages risk and insurance for businesses when there are financial fluctuations.
  • Supports business leaders to regulate the financial situation of the business. The information from the financial accountant is also a legal basis to help businesses clearly resolve complaints, disputes, bank loans and investments.

Important Principles to Remember

Financial accounting should comply with the general corporate accounting rules. For instance:

  • Assets and liabilities are initially recognized at cost
  • Consistently apply the selected accounting regulations and methods in each annual accounting period. If there is a change in the method, the accountant should make a detailed explanation in the financial statements
  • To reflect in an objective, factual, complete, and correct manner in the accounting period in which economic, financial, and accounting operations arise.
  • For the preparation and submission of financial statements, accountants must do so accurately and submit them on time. The information and data in the financial statements of the enterprise should be disclosed according to the provisions of Articles 31 and 32 of the Law on Accounting.
  • Accountants evaluate assets and allocate expenditures and receipts in a uniform, careful and accurate manner with no deviation.
  • Preparation and presentation of financial statements must reflect the true nature of each transaction rather than its appearance

Financial accountants need to make monthly, quarterly, and annual reports such as: 

  • Monthly report: Provide VAT report, PIT report
  • Quarterly reports: Provide VAT reports, PIT reports, reports on the use of invoices
  • Annual report: Financial report, PIT finalization, CIT finalization, license tax
  • Accounting book:
    • General diary
    • General ledger
    • Receivable and payable report
    • Consolidate inventory report
    • Management of cash receipts and deposits
    • Management of raw materials, goods, finished products
    • Manage business revenue and expenses

In addition, a financial accountant also performs other tasks such as announcing the issuance of invoices, checking payment papers, etc. 

Management Accounting vs Financial Accounting

ContentManagement AccountingFinancial Accounting 
Purpose Provide information to serve the management of production and business activities.Provide information for the preparation of financial statements. 
Target customerCorporate managers (Board of Directors, Board of Directors). Business managers and external entities (Investors, banks, tax authorities, financial authorities, statistical agencies).
Providing information principlesThere is no obligation, managers are free to decide and adjust in accordance with the needs and management capabilities of the business.Respect the generally accepted and used accounting principles. In other words, financial accounting must ensure consistency according to certain accounting principles and standards so that everyone has the same understanding of accounting principles. Accounting information, especially financial statements, and financial accounting must comply with the provisions of applicable laws, especially the requirements of financial management and the requirements of society through disclosure. mandatory data.
Information’s scopesRelated to the management on each department (workshop, department) to each relevant individual.Involves financial management on an enterprise-wide scale.
Report timelineManagement accountants have more reporting periods: Quarter, year, month, week, day.Financial accounting has a reporting period: Quarterly, annually.
Information featuresEmphasize the relevance and flexibility of data, information is aggregated from many different angles.Reflect past information that is objective and verifiable. 
Statutory CompulsoryManagement accounting is not mandatory.Financial accounting is required by law. It means that the books and reports of financial accounting in all enterprises must be unified.

For small businesses and micro-enterprises to set up a complete and effective accounting system is quite difficult because of resource and cost constraints. Therefore, choosing an accounting service provider is currently the optimal solution for businesses today. Enterprises do not need to spend too much on paying staff salaries, office rental costs, or recruiting full accounting positions such as financial accountant, chief accountant, tax accountant, but still have a reporting system of reports and books in accordance with regulations.

At Shoeboxed, we provide the best receipt tracking and management system. As accountants and business owners using the Shoeboxed system, there is no need to worry about manage paper receipts as well as extracting transaction details from these invoices. Sign up now to use Shoeboxed for free or reach out to our representative for a demo and customized business plan. 

3 Outside Resources Every Entrepreneur Should Turn to for Business Help

If you feel like your business isn’t swimming along as well as it could, there are plenty of resources that you can utilize. Accountants, mentors and SCORE are just a few of the places you can turn to for business help.

This guest post is brought to you by Outright, the simplest way to manage your small business finances online. Sign up today for a less taxing tax time!

Hey, do you remember all those “How to Run a Business” courses you took in high school? Or your mom and dad sitting you down at the dinner table and teaching you how to write an invoice? Of course you don’t, because when it comes to business education, we are often woefully unprepared.

Sure, we all know how to do what we love – whether it’s repairing bicycles or baking cake pops– but negotiating with a vendor for a better rate? That’s something that you just have to pick up on the fly. If you feel like your business isn’t swimming along as well as it could, why not call on one of these three experts?

1. Accountant

Oh no! I have to call an accountant; does this mean my business is going under? Or am I super successful and can just throw money around? Most business owners get the idea that an accountant is only for specific circumstances – like dealing with Tax Day. The truth is if you ever need any financial advice at all, you should feel free to call one up.

What’s important to remember about an accountant is they know so much more about finance than you could ever learn. They know tons of tricks, loopholes and workarounds that you can use to save tons of money. Don’t feel like you have to wait until the last possible minute or when you’re a rich CEO on vacation in Bermuda to contact an accountant and get some advice.

Finances are notoriously the hardest part of an entrepreneur’s daily life, as many just don’t know how to handle them. The sooner you get them under control, the better off you’ll be.

2. Mentor

Who inspired you to get into business? Did anyone help you along the way when you were first getting started? When you had your first big breakdown, who did you call to walk you through how to not collapse under the pressure?

We’ve all had someone along the way who’s either helped us get started with inspiration or help or has shown us the ropes. Mentors are important because they know you and can dispense the sage wisdom that you need at that moment.

Don’t have a mentor? It’s never too late to find out. You probably know someone who has achieve the business life that you dream of. Introduce yourself, ask to take that person to lunch or coffee, and ask if you can pick their brain. Keep it low key and make your intentions clear, and you might just end up with a new mentor.

3. SCORE

What if you don’t have a mentor, and are not sure who to turn to in your time of need? Well, you’re in luck – you have an entire non-profit full of people waiting to help you at a moment’s notice.

SCORE is a network of volunteers who live to help other businesses get the help they need. Supported by the Small Business Administration, the non-profit has over 11,000 mentors and counselors with a wide variety of experience who can get you on the right track.

It doesn’t just end there, though. They hold regular webinars and workshops around the country to get you educated. They also provide free business tools, templates and tips from their website. If you can’t find the solution to a problem with SCORE, it likely doesn’t exist!

There are also numerous other resources available that we didn’t cover, like local networking groups or trade associations, for example, the Freelancers Union.

Where do you turn for outside business help?

Image via Flickr

The Top 3 Tax Mistakes of Small Business Owners

Source Credit: smallbusiness.aol.com

Small business owners are some of the busiest people on the face of the planet.  Between managing inventory, hiring employees, marketing and, of course, selling their products, it can be quite easy for them to overlook some critical practices when it comes to handling their taxes.

Here are the top three most common tax mistakes small business owners make and ways to help you avoid them.

1. Overlooking Tax Deductions

This might seem like an easy mistake to avoid but you would be surprised at how many small business owners actually miss out on valid tax deductions simply because they are not informed.  Virtually any cost a business incurs as a result of its effort to earn a profit is tax deductible.  As long as the purchases are “ordinary and necessary” for the continuation of your business, the IRS will most likely accept the deductions.  A comprehensive list of what can and cannot be deducted can be found on www.taxreceipts.com.

2. Neglecting Bookkeeping Until Tax Time

Even if you have an accountant who does a great job of helping your company prepare its taxes, this doesn’t mean you should completely forget about your finances.  All small businesses should have a system in place that routinely tracks and categorizes their income as well as their expenses in a way that makes sense.  Additionally, this system should be cross referenced with the company’s bank statement each month to ensure accuracy and transparency.  Expenses that aren’t categorized in a timely manner can lead to confusion and even have detrimental impacts on future management decisions.  Waiting until the last second to get your books in order won’t just increase your chances of filing late, but it will also hurt your business at its core since decisions will be made off of insufficient data.

3. Not Knowing the Law

Many small business owners like to believe that their accountants are perfect and know everything there is to know about tax laws in their states.  This is, of course, false.  Small business owners need to take it upon themselves to research exactly what is expected of them beyond simply paying federal, state and payroll taxes.  If your accountant makes a mistake, the penalty falls on you, not them.  These penalties can be quite severe and carry some substantial fines.  It is important to utilize all the various free online resources so you can know exactly what your company is responsible for paying.  Be sure to check out www.SBA.gov and www.irs.gov/Businesses for useful tips and tools about staying updated on tax laws.

Are you a small business owner who has learned the hard way about making tax mistakes?  Please drop us a line in the comments section with some tips of your own!