ACC 291 Learning Team Study Guide Week 2

Resources: Ch. 9 of Financial Accounting.

Complete the one assigned learning team problem found in the Week 2 Microsoft^® Excel^® template provided in the Course Materials forum.

Submit the completed Microsoft^® Excel^® template to the Assignments Tab.

Small Business Accountants - Five Services They Offer In Addition To Data Entry Work

Small business accountants are responsible for the most critical functions of an organization. Their work involves tedious activities such as analyzing, interpreting and presenting intricate data. Unlike bookkeepers who mostly monitor and track daily transactions of a business, accountants are involved in business planning and management. Many small-scale entrepreneurs overlook the duties of an accountant and prefer to employ a bookkeeper who knows how to do simple journal accounts. What such entrepreneurs do not realize is that small business accountants are multi-purpose professionals. They can offer the following five services in addition to data entry work.

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Financial Consulting - Small business owners are easily tempted to mix personal and business finances. An accountant can advise them on how to separate and invest both personal and business finances in profitable ways. Tax Consulting - The issues of tax plagues many small-scale businessmen. Most of them want more than just having their tax forms prepared. Small business accountants are actively involved in tax planning and counseling in order to help their clients spend less money on taxes and avoid tax related issues with the IRS. Internal Business Consulting - Accounting firms that specialize in small enterprises services are perfect consultants. They consist of big teams of experts in various fields of business such as Accounting, risk management, inventory management, human resources, auditing and taxation, financial planning and Information Technology among others. As a result, they are dependable when a small-sized organization is seeking a growth and an expansion strategy. IT services - Small business accountants have changed the way they carry out their duties because of the ever-changing Information Technology field. In the few past years businesses were faced with the challenge of introducing computers to their work stations. Today the internet development has brought about major changes in the accountancy work. Reliable clerks should not only up-date the existing accounting software versions but also provide advice and guide entrepreneurs on IT matters. Borrowing Advice - Since an accountant prepares the loss and profit accounts of an organization, he or she is in a better position to offer borrowing advice. If the company lacks enough money to maintain its projects or add others, an accountant can advise it on the best lenders to approach and if there are other viable sources of funds. Proper choice of small business accountants should not be disregarded. A business owner or manager must decide if the best candidate should work on a full-time or a part-time basis. To make this decision he or she must focus on the cost of hiring any of the two candidates. The best part-time bookkeepers are outsourced accountancy firms. They control the functions that take place in a remote accounting department from their office. These firms do not require health benefits, office space or any other requirements that a full-time in-house small business accountants do.

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When selecting the most appropriate small business accountants one has to focus on education background and competency levels. Certified Public Accountants are accepted everywhere in the US. They have passed various tests that are offered and administered by their states. They are knowledgeable in many areas of the accounting and finance profession. When interviewing a representative of an accountancy firm or a CPA candidate, a small-scale business proprietor should ask questions about the hourly fees they would charge. He or she should also ask if the fees charged include other advisory services too.

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The Difference Between Hiring Full-Time Accountants and Accounting Firms

Managing your finances sets apart the success and failure of any business. The size, the amount of sales and expansions do not determine the how prosperous your sales were. If you are spending more than what you're gaining from your business, your high income wouldn't matter. In order to execute effective finance management, the first thing you need to do is to keep track of your financial transactions. You must be able to accurately document these records which will serve as your reference when you are determining the financial status of your company.

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This will enable you to estimate the net income and your future expenses. This will help you compute for your profit upon comparing these two. While it seems easy to keep financial records, when they pile up - they can be serious trouble. Each day will be very hectic as the task can be very time-consuming and tedious at the same time. This can take you days or weeks. You cannot afford to lose this much time when you want your business to prosper and be more profitable. Now, let us discuss the pros and cons of hiring accounting firms against full-time accountants. Employing a team of full-time accountants to do your bookkeeping, financial balance, tax returns preparation, payrolls, auditing and financial reporting can be beneficial to you in the way that they can ensure the job is properly done as you can examine them closely. Upon their application to your company, they will bring pertinent documents that will show their expertise and competency in the field. Their certifications and other supporting information shout out what they can do for your company. You will definitely see whether they are the perfect match for the job. Moreover, you can evaluate their personality and see if they can adjust to your work conditions. However, it might cost you more to hire full-time accountants as they are paid monthly. Aside from their salary, you have to give them overtime pay and other benefits.

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If you choose to outsource your finance tasks to accounting firms, it may cost less for you. You only need to pay for a fixed hourly rate. Also, you wouldn't have to deal with giving benefits and rewards. Accounting firms also have bookkeepers that can manage and update your records. They can also generate financial reports whenever you need them. The disadvantage of hiring accounting firms is the competency of the workers they are hiring to do the job for you. There are several companies which have credibility and reputation and are tested by time. These accounting companies hire certified professionals and experts.

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Accountants Seeing that Specialists

Sales can be a wide-ranging theme which often involves several aspects of a company in addition to the private money of an individual. Sales subject areas cover anything from bookkeeping, expense sales, preset property sales, duty sales, auditing, and much more. But sales is not only in relation to word options in to the sales process. That will involve may possibly different factors definitely not typically related to sales. A good accountant besides prepares monetary assertions, bills blankets, along with reviews regarding organizations. Many people are going to complete several areas that are typically thought to be talking to throughout the different varieties.

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Accountants many times will offer you providers like producing a company plan, creating a organization succession plan, property security, fraudulence deterrence, diagnosis in addition to analysis; in addition to duty getting ready regarding organizations, close ties, LLCs, estates, trusts along with agencies. There're included many times throughout auditing the actual monetary assertions associated with organizations. They are often involved with creating a buy-sell arrangement, monetary planning along with related subject areas. Accountants typically are generally school grads using at least the 4-year college amount, usually throughout sales or possibly a related field. Many continue to secure a master's amount in business Operations, Sales, Forensic Sales along with related levels. A few continue to explain to with schools, universities, in addition to universities. A few start their unique organization many situations do this soon after being employed by either a public sales organization or perhaps work throughout exclusive marketplace. A few grow to be Accredited Open Accountants (CPAs) that can issue thoughts around the monetary assertions associated with organizations. Not all accountants are generally CPAs none are generally these people essential becoming a CPA. Above the up coming 15 months and much more it will have articles in relation to sales, but additionally the various talking to related providers several accountants offer. Occasionally accountants are going to complete personal bankruptcy predicaments and so are presented through strict policies established with the personal bankruptcy laws and regulations. Though they're well known subject areas, the actual articles getting presented below will offer you details about some of the more profitable talking to areas which accountants, duty preparers along with organization instructors may well be thinking about seeking. They're tried out in addition to confirmed talking to providers which make different degrees of earnings. A few require good degrees of training; other folks require training which is less time intensive.

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No matter what approach the consultant wishes to look, these kinds of providers are expected through each and every organization in a single kind or perhaps one more. Finding out tips on how to offer these kinds of providers will be very good for organization buyers regarding instructors. Finding out just how these kinds of providers will advantage your company or perhaps private monetary lifestyle will be presented from the articles. Some of these providers demand a amount other folks don't.

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Free Small Business Accounting Software

Free small business accounting software primarily focuses on assets. Assets may be described as valuable resources owned by a business, which were acquired at a measurable money cost. As an economic resource, they satisfy three requirements. In the first place, the resource must be valuable. A resource is valuable if it is cash/ convertible into cash; or it can provide future benefits to the operations of the firm. Secondly, the resource must be owned.

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Mere possession or control of a resource would not constitute an asset; it must be owned in the legal sense of the term. Finally, the resource must be acquired at a measurable money cost. In cases in which an asset is not acquired for cash or a promise to pay cash, the question is what it would have cost had cash been paid for it. The assets in the balance sheet are listed either in order of liquidity- promptness with which they are expected to be converted into cash- or in reverse order, that is, fixity or listing of the least liquid (fixed) first followed by others. All assets are grouped into categories; that is, assets with similar characteristics are put in one category. The assets included in one category are different from those in other categories. The standard classification of assets divides them into fixed assets, current assets, investments and other assets. Fixed assets are fixed in the sense that they are acquired to be retained in business on a long-term basis to produce goods and services are not for resale. In contrast to fixed assets, current assets are short-term in nature. They refer to assets/resources, which are either held in the form of cash or are expected to be realized in cash within the accounting period or the normal operating cycle of the business. Investments represent investment of funds in the securities of another company.

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Cost-free Business Human resources Application

Cost-free small company sales application mainly targets on assets. Property could possibly be referred to as useful resources held by way of a business, of acquired at the measurable money price tag. As an financial learning resource, they gratify several demands. To start with, the actual learning resource should be useful. Some sort of learning resource will be useful when it is cash/ convertible straight into funds; or even it could possibly produce upcoming rewards for the surgical procedures of the company. Next, the actual learning resource should be held.

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Simple control or even control of the learning resource wouldn't normally be construed as the asset; the item should be held in the appropriate feeling of the phrase. Lastly, the actual learning resource should be acquired at the measurable money price tag. Throughout circumstances through which the asset is not acquired with regard to funds or maybe a offer to cover funds, the actual problem will be precisely what it could have got price tag got funds been paid for the item. This assets in the stability page are generally listed possibly so as of liquidity- promptness together with that they can are hoped for to get became cash- or even in reverse order, that's, fixity or even set of the very least water (fixed) very first accompanied by other people. Many assets are generally grouped straight into categories; that's, assets together with comparable characteristics are generally devote a single type. This assets incorporated into a single type will vary from people inside various other categories. The typical classification of assets divides these people straight into preset assets, existing assets, assets along with assets. Preset assets are generally preset in the feeling that they are acquired to get held on to operational using a long-term time frame to produce items and also companies will not be with regard to resell. Unlike preset assets, existing assets are generally short-term inside dynamics. Many people reference assets/resources, which might be possibly used in the form of funds or even are hoped for to get recognized inside funds in the sales time period or even the standard functioning routine of the business. Ventures represent purchase of money in the securities of yet another organization.

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Accrual Accounting Vs Cash Accounting for Small Medical and Dental Practices

Accounting is a process to identify, measure, and communicate the business economic information in a financial record for decision making and tax returns purposes. Accrual Accounting and Cash Accounting are two commonly used methods. A small business, which renders service and generated revenue of less than 5 million annually, will meet the IRS qualification that allows the small business owner to elect either one of the two accounting methods.

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There are many excellent online articles written by CPAs on the advantages and disadvantages of either accounting method. I noted some CPAs were advocating the Accrual Accounting as being superior from the accounting standpoint. As a sole proprietorship owner of a dental practice for many years, I see Cash Accounting should be the choice of accounting for the small medical/dental practice and other service type businesses. (1) Cash Accounting is simple and intuitive. Nowadays, a simple bookkeeping software program can track all business transactions without the need of a bookkeeper. One only needs to record all daily transactions such as receipts (income) and written checks (expense). The program can display monthly balance sheet and streamline the tax preparation process at the year-end by exporting data to a tax preparation software. (2) Accrual Accounting is a high maintenance system, which means a higher business expense for professional accounting service. Accrual Accounting has both Account Receivable and Account Payable entries, which have to be meticulously reconciled periodically to reflect the actually financial events. And those two numbers have to be monitored constantly by the business owner.

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(3) In a medical or dental practice that accepts popular insurances, Account Receivable receipts are from both individual patients or insurance companies. I have learned that patients who do not take care their bills within first 30 days of billing are likely to be delinquent. Health insurance companies sometimes dragging their feet for more documentation, but they will pay those claims under lower contacted benefits in two or three months. Therefore, the practice books a fantastic revenue in Accrual Accounting will have a false sense of great revenue numbers, but is subjected to massive write off of the Account Receivable later due to the reality of the low patients collection and insurance company low reimbursement rates.

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