Accounting is a much more complicated task than simply balancing a checkbook. It usually involves a more detailed understanding of finances than the average individual knows. To some extent, an understanding of economics can be helpful, but accounting remains a specialized field. As such, just like searching for a doctor or medical conditions, an accountant should be searched according to his or her specialty. These specialties can be divided into three separate categories unique to each type of application of their skill.
1. Personal Accountants – These are the types of accountants one generally takes their annual income tax records to. They specialize in handling accounting at the individual level. Many of its services and advertisements are designed for personal use. If you are someone looking for personal accounting assistance, then you should consider a personal accountant.
2. Small business accountants: This type of accountant deals best with small businesses. This includes personal business. It is generally limited to companies with no more than 20 to 30 employees. These types of accountants have specialized knowledge relevant to small businesses. In particular, they know the local, regional, and national tax codes applicable to small businesses.
3. Corporate Accountants – This is a completely different type of accountant than those discussed above. They are familiar with much larger companies, usually with more than 30 employees. His specialties not only include the accounting records required for specific corporate business structures, but also encompass familiarity with international trade and income regulations that apply to corporations.
This is not to say that an accountant or accounting firm is not familiar with more than one type of accounting. While an accounting firm can manage many tasks, it is important to consider the specific area of specialization for which a given accounting firm is best suited. Chances are, if you’re considering using a Fortune 500 accounting firm to manage your personal finances, you’ve selected the wrong company. Likewise, if you’re a small business or corporation trying to cut costs by hiring a personal accountant, you’re making a mistake. You will likely end up paying much more than you save in the event of incorrect returns being filed.
With this in mind, it’s important to not only consider the business you’re hiring, but also check their references. In the case of personal accounting, you likely have friends or neighbors who are familiar with the accounting firm and can provide an honest reference. In the case of business, one simply needs to ask a supplier, vendor, or company with whom they are doing business. A direct and simple referral can usually be obtained.
