Accounting FAQ's

5. How will an accounting firm benefit my business?

(A) Assistance with accounting principles. Competent firms will assist owners or officers of the business with understanding accounting principles that will allow them to make intelligent decisions concerning its management, direction and growth.

(B) Spending. An accounting firm should track the spending habits of the business by calculating what percentage of revenue is being disbursed to the costs incurred to produce that revenue. Poor tracking and control of expenditures mean poor business management.

(C) Generation of financial statements. Financial statements tell if the business is making or losing money. Monthly generation of profit and loss statements will report the business's net income or loss. This report will allow the business to make changes in its operations, if needed.

6. Can I really afford accounting services?

Businesses, especially newly formed ones, often ask if spending money on accounting services is a wasted expense in its start-up period. It is never a wasted expense, but in all likelihood, a necessary one in the going concern of the business. Accounting fees are normally no more than one to two percent of the business's annual gross revenues.

7. What are accounting methods?

"Cash" and "accrual" are accounting methods. These are the ways revenue is reported. Most incorporated businesses utilize the accrual method, but the appropriate method depends on income volume, whether or not services are performed on credit, and the business structure.