What Are The Three Types Of Accounting Services For a Small Business?
Small businesses often outsource some or all of their accounting function to gain access to expertise at a fractional cost. There are 3 types of accounting services small businesses can purchase: bookkeeping, strategic finance, and tax accounting. These main types of accounting cover the majority of potential services.
What Are The Categories Of Accounting Services?
Small businesses buy services in these 3 types of outsourced accounting:
Bookkeeping (Financial Transactions)
The main role of a bookkeeper is to categorize and reconcile business and financial transactions. These could be credit card transactions, invoices, or other forms of AP and AR. Their role is to provide accurate and timely financial information for the company and record financial transactions.
Strategic finance is a big bucket that is often broken down into controllership and CFO services. Controllership is oversight and management of the accounting process. This could mean improving processes, managing/building forecasts, financial reporting, financial review meetings, and suggesting improvements. CFO-level services target bigger picture decisions such as fundraising, hiring decisions, product development or cuts, tech stack management, financial model builds, pro forma cap table, and development of the financial team.
Tax accounting has two main functions: compliance and strategy. A tax accountant’s primary role is to make sure a business is compliant with federal, state, and local tax laws. Their secondary role is to provide strategic advice as to how to maximize your dollars within the taxes. An example of this is looking at a business’s qualifying deductions.
What Are The Major Types Of Accounting Systems?
There are 2 major types of accounting systems: general and industry-specific. General accounting systems are customizable to your business and help fulfill the needs of most businesses. These include systems like Netsuite, Xero, and Quickbooks Online. Industry-specific accounting software systems
What Are The 3 Main Things In Accounting?
There are 3 main types of accounting: tax, financial, and cost. Tax accounting is preparing and filing taxes to ensure compliance with local, state, and federal regulations. Tax accounting is also leveraging tax breaks and laws to benefit the financial state of the business legally. Financial accounting involves bookkeeping and strategic finance. It leverages transaction records, predictive analysis, and real-time metrics to inform business decisions. Cost accounting, also known as managerial accounting, is understanding the cost a business incurs to produce a product and the profit a company earns to sell it. Typically, cost accounting in inventory or production-based industries such as manufacturing, textiles, and food processing.
What Type Of Accounting Do Small Businesses Need to Help with Financial Statements and More?
All small business owners need tax accounting and monthly bookkeeping services. This simple list of accounting services for small businesses includes a lot of important functionality. These functions of accounting ensure businesses are compliant and have a logged record of their financials. Savvy entrepreneurs also seek out strategic accounting services. Financial reports and models, pro forma cap tables, forecasts, and financial review meetings are tools to give your business a competitive advantage. All in all, the types of accounting services in small business needs are tax, bookkeeping, and strategic accounting.
Accounting services for small businesses cost varies greatly depending on the level of the above services. Typically bookkeeping is around $250-$750 a month, depending on the level of services. Bookkeeping plus strategic financials ranges from $1000-$4000 monthly depending on the level of services and the use of a CFO vs. a controller.
What Is The Most Common Type Of Accountant
The most common type of accountant is a bookkeeper, also known as a staff accountant. These accountants are the most common because they require the least amount of training. They also do a bulk of the transaction categorizing, making them essential for both large and small businesses.
Many small businesses begin their search with a query such as, “Accounting services for small business near me.” Local accounting firms are no longer needed with the evolution of cloud-based accounting software. Most small businesses leverage remote accounting, whether it’s an outsourced accounting firm or a full-time hire.
How Milestone Can Help Without the Hassle of Big Accounting Firms
Milestone is an outsourced accounting firm that specializes in bookkeeping and strategic accounting. We are experts in small business accounting. We bring proven process and staff expertise that immediately elevates the decision-making of your business. With Milestone, you get an accounting service that drives business growth, not just reflects it. Reach out to our team today to learn more about a partnership with Milestone.
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