There are two main divisions of accounting, including corporate and public accounting. Corporate accountants are accountants who manage accounts and finances of a financial entity or a business. On the other hand, public accountants sell accounting services, such as auditing to companies. Public accountants also offer services for different firms. Corporate accounting firms hire corporate accountants or highly-qualified accountants, such as CPAs run these firms. Corporate accountants also manage bookkeeping for small businesses besides handling financials for various businesses.
In this post, we are going to have an in-depth look at accounting firms with corporate accountants and what they do. Before we do, we shall also have a look at what corporate accounting is.
What Is Corporate Accounting?
Corporate accounting involves handling of the processes, such as preparation of cash flow statements, financial records, company balance sheets, etc. In addition, corporate accountants ensure correct recording controlling, and monitoring of financial and operational activities of a company. It also aids management to have the right information to make the best business decisions. What do corporate accounting companies do? We are going to have a look at it next.
Corporate Accounting Companies Create & Upkeep an Accounting System
Corporate accountants have to create, manage, and maintain the corporate accounting system of a company. Today, accounting companies manage the accounting system for a company via a software program, such as ERP system. In addition, the accounting department creates separate accounts to manage business elements, including assets, income, liabilities, and expenses. Corporate accountants in corporate accounting firms assign each account with general ledger codes. They set the overall system to record specific transactions into the matching accounts via an automated system.
When accounting companies have more advanced ERP system, they also create a variety of reports for the management. Then, the management assess the state of company’s assets, liabilities, as well as cash flow. These reports are generated via real-time data and information. Additionally, financial reports that corporate accounting companies produce are for the purpose of auditing for regulatory bodies or public accountants.
Some Common Services That Corporate Accounting Companies Render
Corporate accounting companies, such as GTA Accounting render bookkeeping and accounting services to SMBs, in particular. Moreover, the following are some of the common accounting services that corporate accounting companies render SMBs:
Managing Accounts Receivables:
Corporate accounting firms manage accounts receivables for businesses to whom they render bookkeeping services. Accounts receivables is an area of business that deals with records and money coming into a company. Accounts receivables also involve monitoring of customer accounts that are due for payments. Plus, it involves monitoring of the ageing of accounts. Accounts receivables also aid in collecting late payments from customers. Accounts receivables also aid management in a company regarding cashflow forecasts. Particularly, in terms of the timing of the cash entering the business.
Managing Accounts Payables:
Corporate accounting companies also deal with receiving and processing the invoices coming into the company for payments. Then, accountants who manage accounts payables for businesses ensure making of payments to contractors and suppliers. Moreover, accounts payables involve two types of payments, embracing fixed and variable payments. Fixed costs relate to costs incurred every month on a regular basis, like rent and utility bills. Variable costs include things, such as raw materials, finished goods, and one-off professional services.
Processing Employee Payroll:
Corporate accounting companies also offer payroll processing services to businesses. Payroll processing involves calculation of staff salaries according to different work periods. Different work periods include weekly, bi-weekly, or monthly. Corporate accountants also calculate any benefits, perks, or sundry items, such as expense refunds. In addition, they also calculate the taxation that needs deduction and submission to the tax authority while managing employee payrolls.
These are the common accounting tasks that corporate accountants manage. Corporate accounting aids businesses in knowing when money is coming in and going out. Plus, it helps businesses know when the payments are due. Corporate accounting also helps companies know the true financial position of their businesses. Moreover, small businesses, in particular outsource bookkeeping and accounting services from corporate accounting companies to manage their financials cost-effectively.
Conclusion
There are two main divisions of accounting; corporate and public accounting. Corporate accounting involves managing of the financials for businesses besides books of accounts. Moreover, public accounting usually involves services, like auditing that companies offer different firms. Corporate accountants in corporate accounting firms create and upkeep an accounting system to manage financials for businesses. The following are the most common accounting services that corporate accounting companies render business:
- Managing accounts receivables for businesses
- Handling accounts payables for businesses
- Processing employee payrolls
In addition to these common accounting services, top accounting firms offer other accounting services to businesses as well. Tax services and business advisory, to name a few. To sum up, corporate accounting aids management in a company to make the best financial decisions based on available financial data.
