5+ Steps To Check Out For Accounting Services
What is Accounting?
Accounting is the process in which measurement, processing and communication of financial information for economic entities has been done. This is also known as the language of business. Accounting is very essential for every company even for every people who is earning money. Accounting information is required to grow and develop the company in better way. Due to availability of accounting information the important people of any company can take decisions for the wealth of their company in right way. The key people of a company who needs the accounting information more than anybody else are directors, chairperson, accountant, investors, members of management team and creditors. Accountants need these accounting records for their further accounting activities. They perform their tasks on available raw information and old accounting information.
There are several fields of accounting such as financial accounting, management accounting, auditing, and tax accounting. All these fields of accounting are essential for any company to make their new market strategy.
- In financial accounting accountant prepares a financial report for the external users such as suppliers, investors etc.
- On the other hand in management accounting accountant prepares financial report for the internal users such as directors, members of management etc.
- Auditing is the process of cross checking of accounting information and records so that the number of mistakes could be minimized.
- In tax accounting all the records which are necessary to show to the Income Tax Department has been prepared.
There are several accounting services comes under accounting and its field. These services are steps of an accounting service without these steps accounting service will never be done. There are several steps of accounting services which can be outsourced some of them are discussed here-
- Accounts Receivable is a payment that a company will receive from its customer or client on supplying goods or provide services. These are generally in form of invoice and has to be paid in an agreed time frame. This has been recorded as “Bills Receivable” on the Assets side of the Balance Sheet of a company.
- Accounts Payable is the payment that a company have to pay to its suppliers either for goods or services. These are mainly for the essential utilities such as electricity bills, water bills, rentals etc. This has been recorded as “Bills Payable” on the Liabilities side of a Balance Sheet of a company.
- Payroll Processing is the record of all the salaries, wages and bonuses paid and all the deductions of an employee for a company. While in accounting the record of all the payment that has been made to an employee for all his services that he provide is known as payroll. A little change in some digits can make a huge effect on the taxes that has to be paid by an employee. So, payroll processing has to be done very carefully and with full concentration.
- General Ledger Maintenance is the maintenance of the general ledger book. General Ledger book is the backbone of any accounting system of any company. A general ledger book contains all the transaction records of a company, their all financial information of assets, liabilities, equity, capital, investments, shares, revenue, expenses etc. General ledger book also contains non financial data of a company, that’s why it is the backbone of any accounting system.
- Inventory Reconciliation is the process in which a company checks its actual physical inventory with the amount that recorded in its accounting books. Inventory is known as stock. Normally during the process of auditing the inventory reconciliation takes place several times in year but at the end of financial year the thorough inventory reconciliation needs to be done.
- Bank Reconciliation is the process of tallying the records of bank balance of a company’s bank pass book provided by bank and their own records of their own cash book. If any difference has been found then match the recent entries in both the books, most of the times the problem has been solved in quick time but if the problem still persists then check all single entries since the last reconciliation. It is good to do bank reconciliation at short intervals of time regularly this cuts off the mistakes most of the times.
Why To Outsource?
These accounting activities can be outsourced, because outsourcing these activities proved to be the cost cutting activity. Due to cost cutting the margin of profit increased automatically. There is another way by installing these accounting related software, due to this time will be saved but there is a need of professionals who can handle these software very well. That’s why most of the companies like to outsource these accounting activities. But still there are some small companies who are doing these activities manually in their own firm with their in house team members. For efficient and effective working of a company these accounting activities has to be outsourced. eDataIndia is one of the well known accounting service provider company and has a dedicated team to work on.