Top 10 Accounting Myths
There are many times when I am at the store, restaurant or even outing, and someone from my family or group of buddies tells me "You're the accountant, how much is this?" and asks me to figure out something in my mind. I'm going tell you in on the insider information… I'm not a mathematician. Instead, it's an accountant. If my calculator isn't in my vicinity, please do not ask me to calculate something. I'm going to give you a couple of other secrets too. Find below the most popular 10 Accounting misconceptions I've created.
1 Accounting Myth
Accounting's all about mathematical calculations. This could be closer to the reality. Yes, you do utilize math, but you also use it for an engineer, salesman lawn mowing hair stylist, etc. If you wish to be paid, you'll need to calculate how much you owe as well as the difference if you get paid in cash, the commission percentage, etc. Accounting professionals use math in the same way. Accounting is the process of accounting for liabilities, assets expenses, income and so on… Yes; but accounting is not just about numbers. The "meat and potatoes" of accounting is actually research and telling stories. Do you like making a complete puzzle? In accounting when you examine the numbers, you're looking for holes to place the correct piece in. You must use those numbers to inform the owners of a company or bank, shareholder, or even a manager about what these numbers are; how they can utilize them, and what they can anticipate in the near future. It's not algebra, but analytics.
2 Accounting Myth
Accountant = Tax Preparer or IRS Agent. Oh so wrong, wrong, wrong. Be aware that when you join an important tax chain or franchise, your tax returns are likely to be done by a qualified "tax preparer" NOT an accountant. An accountant is one with an education in Accounting. Yes, I did prepare taxes from the time I graduated college. I was employed by an accounting firm that was a public CPA firm however, the sole reason I was required to complete the task was that the firm's partner had several tax clients. In general, I audited businesses. This is not an audit of taxation. This is a sign that I went into their office to look over their books and then checked their the accuracy. Following this, we'd present them with a summary of the areas that needed improvement and those which looked good. This is a brief outline of an audit for a company. A lot of accountants work for private firms, preparing financial statements for owners and managers and some are employed in fraud analysis which helps companies identify or uncover fraud. Other accountants provide advice on various subjects.
Be wary of anyone who claims they're an accountant. I have heard bookkeepers and secretaries make this claim frequently and do not know the distinction between journals and a coffee maker. To not denigrate secretaries or bookkeepers, but they are just that. I admire them all, and I am very grateful for their work since I have many as part of my team, but they aren't accountants. I do not inform my clients that they are accountants. It is not a fair assessment of the person they really are and their credentials.
3 Accounting Myth
Accounting and accounting are only for men exclusively. In every business I've employed or worked the ratio of females to males is 50 percent or more to the advantage of women. In actual fact, many are controlled by women. Yes, I've observed mostly males in leadership positions, but women are expanding rapidly in this field too. Since many companies recognize women's ability to balance work and family [usually more effectively than menThey are now recognizing the skills and abilities of women working in these fields. Guys, you're not being forced out. This is the perfect place for women and men to showcase their capabilities. But don't count on the gender of your partner to determine your status in the world of accounting.
4 Accounting Myth
Accounting professionals are either boring or introverted and do not like working with clients. Even tax accountants have to be a social person. Everyone has to interact with employees, clients and vendors, clients' customers and so on. I enjoy this profession because of the interactions with people. I am a talker (I'm sure my husband will agreeand I am a huge fan of instruct. I love to take accounting and transform it into an understandable language for my clients that include Funeral Homes to Hair Stylists. I am able to show the clients how their numbers provide them with the information they're required to hear, and what the future may bring.
My friends and colleagues in college were amazing even though we're all accountants. We drank at bars or danced in clubs and went to the lake for swimming and ski, worked out in local gyms, and so on. The pace of life isn't boring for us, and, as a business owner and accountant I can assure your that the life I lead isn't boring. I have two small children and my wife (business partner) and family, employees, friends as well as meetings for clubs and organizations and the list is endless. If I am able to complete chores, it's an added benefit during the course of.
5 Accounting Myth
Small businesses do not require accounting or be left until it gets to become too much to manage myself. Ok, which means that as a small-scale business owner, you'd say that you do not need to plan your budget, forecast your finances, keep track of the latest the latest trends in your company, or even know the newest most beneficial tax benefits. There are clients who are just a single-person service firm that is making around 20K in a year.
Every business should have an accountant on their side. The individual or business has to be reliable and knowledgeable however, you require them all. A business should not be managed by determining the availability of money within the banking institution at the moment. When it comes to the conclusion of the year what do you know if you'll have to submit an income or loss in the eyes of the IRS? You must make sure you report as much loss as possible to pay the least amount of taxes you can , or else you're doing yourself a disservice. A lot of tax companies will cost you an arm and an arm if you walk into their offices with a box, or in certain instances, a garbage bag full of receipts, and ask "Here. Please do my taxes." They will cost you for the time they plan to devote to glancing through these receipts and more likely, they won't take the time to ensure they allocate every nickel and dime into losses to ensure you pay the least possible in tax.
Your accountant will keep track of your financials throughout the year, and it is important to keep everything tidy and tidy when it's time to prepare your taxes. Your accountant should be able provide you with monthly financials that provide you with areas to make improvements in a particular area and have your reports prepared for loan applications, assist in making financial choices, assist you maximize the benefits of the tax benefits of the past and let you know whether your business is likely to move towards higher or lower revenues in specific months, in the light of past experience. All of this is essential information , and when my clients use my service, they're shocked at how they have been able to manage their businesses without my help.
6 Accounting Myth
An accountant could take me at least an arm leg. Well, this could be the case when you choose an expensive firm however, when you are looking for an attorney hire an attorney like Robert Shapiro, it wouldn't be inexpensive also. It is essential to locate the best firm or person for your needs. Examine references, qualifications and their services. Make sure that the cost is in line with the industry standards for your area . Also, make certain that they make you feel confident cooperating with them. You must be the first for them, and you must be able find an expert or a company to collaborate with.
My company is known for its low prices because that's how I created it. I set out to build an organization that could offer services to businesses that are small or start-up and still be affordable too. I've always charged less that the expense of employees full-time. In some cases, I've been smaller, depending on the client's requirements, and their financial circumstances. Contact me via send me an email and we'll chat to determine if we can help or help you towards the correct direction.
7 Accounting Myth
I pay for business expenses from my own money. It's not a big deal. WRONG. If you operate or own your own business, it's an enterprise and it is not your partner. You must note the time you paid for expense from your pockets. It is money that can be returned tax-free to you.
As an example I have a customer whom I recently met. She owns a salon. There is no business bank account, and all expenses are paid from her personal account. She now transfers the earnings into the same account. Her husband is an employee full-time in a different business. There is no way to know whether she's actually making money or not. The second reason is that she receives an amount of money. The salary is tax deductible. If her business isn't operating at a profit it is because she was paying more taxes than she ought to have. She has never been reimbursed for the out-of-pocket expenses properly, which should have been tax-free.
It is likely that she will at a minimum, be reimbursed for the expenses she made out of her own pockets tax-free prior to taking a salary that is tax-deductible. In my capacity as her accountant I've suggested she create a business bank account. In this instance, she will transfer her earnings into the account and pay the bill from there. If there isn't enough cash to cover bills, she'll pay them from her pocket, but she'll be sure to inform us of this. We will record the reimbursements as due to her tax-free. She gets the cash back when the company's cash flow allows it.
8 Accounting Myth
I'm not able to and do not have the need to create goals for myself and my business. Every business I've encountered, read about or worked with has employed goal-setting as a vital element of running their business. The world as we know it can be a rollercoaster ride. Whatever the field the changing trends can create chaos and often can force a company in a position to fail if it does not keep abreast of the latest trends, technologies and consumer data.
Take a moment to write down 10 goals for yourself as well as your business. When you're done, place them in order of priority starting from the top to the bottom. Keep them in a place in which you are constantly conscious to set goals. Every month, you should sit down to go over the goals. Record what you've achieved to reach each one , and then note if you've reached one or more of them. Once you've reached your goals, mark them off of the list. Make sure you do not take them off. This will give you a sense of satisfaction and shows that the hard work you put into it will pay off.
9 Accounting Myth
I don't really require accounting reports to understand what my company's performance is. If you are busy, that doesn't mean your business is in good shape. Reports are required to inform you if your costs are in the right place to be in relation to the costs that you're racking up. Reports are required to identify areas of concern, such as theft and waste, loss or profitable areas. When you've complete these reports, you must understand how you can use the information. If you get an analysis that shows you are dealing with a large amount of waste from the manufacturing process, then you must come up with solutions to the issue or find a method to earn money from the waste materials or figure out a way to reuse the material or improve the process to reduce your waste.
In the service industry there are reports that show the allocation of time. If the time allocation is not optimal the company is losing money and, as with the majority of companies in the United States are, I am sure that they are trying to earn money. These reports can help identify the root of the problem and allow you shift the work of employees or perform other tasks in a manner that can bring back profits or boost the profits of your business swiftly and effectively.
10 Accounting Myth
I handle my accounting by myself. I use the QuickBooks. Ha! This has me laughing a bit. QuickBooks is a great software and one I utilize on a daily basis, but it will not completely take the necessity of an accountant out of the equation. In fact many people open QuickBooks only to get overwhelmed and lost. It is useful and could be an incredible tool, but your accountant must assist you in setting it up, guide on how to and should utilize it, and then visit every so often to make sure all is in order as well as run reports and solve any issues. It is possible to be a great business, but if your knowledge isn't in how to manage the accounting aspect of your company properly it is best to consider doing yourself a favor and take help from an accountant about this procedure.
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