Accounting doesn’t just resonate with taxing or managing the costs. When running a business, there are multiple costs linked to the same, and that calls for different types of accounting as well. All in all, there are 7-8 major types of accounting linked to a business, which have been highlighted below in detail.
- Tax Accounting– One of the most popular and commonly known types of accounting. Tax accountants are crucial to a business, as they help the business or an individual to work out their taxes, and minimise the money spent in paying taxes as well. A tax accountant brings in a green area for not just sole proprietors, but large firms as well. Tax is one thing that cannot be neglected, and the greater the carelessness, the higher could be the losses, therefore highlighting the need for a good tax accountant.
- Financial Accounting– Just like you cannot say no to any transactions as an individual or in a business, it is important to record those transactions as well. The activity of tracking, recording and analysing these transactions not just helps forecast costs, but also helps reduce unnecessary expenses, and monitor the same for better profitability of the business.
- Management Accounting– Managers are important to a firm, not just by the roles they perform but by their key contributions as well. The idea of leading the team, managing operations, and performing some key operations, all can be covered by an effective manager. Management Accounting is very essential for those in higher positions to get an overview of the costs incurred, changes at the remote level and close monitoring of the operations. Jumping into the same, managers are the ones tasked with keeping tabs on the same and presenting it to the decision-makers.
- Cost Accounting– To understand the broader picture, the minute details cannot be skipped out either. Therefore, the most important parameter, that is the cost needs to be closely monitored, including the labour costs, and all other sorts of direct and indirect costs incurred by a business.
- Forensic Accounting– We draw an image based on the feedback we receive about somebody. Likewise, we tend to draw upon the strength of the company’s fundamentals based on the litigations a business has been in, including embezzlement, fraud, and much more. All in all, it highlights the relevant documents of a company and also gives a deeper insight into the company if you suspect some malpractice in play.
- Governmental Accounting– The government’s intervention is one crucial aspect of running a business. The policies drafted by the government, the budgeting, financing, and managing of the government’s finances are all managed by governmental accountants.
- International Accounting– If you are planning to be locally based, then it might not appeal to you, but if you dream of expanding, taking your brand global, and expanding into a powerhouse business, then it is important to keep the global policies, and regulations in check, which are effectively managed by international accountants.
- Auditing– Last but not least, auditing highlights the borders of accounting. While auditing cannot be closely linked to accounting, it would be unreasonable to completely exclude the same as auditing works nearby of tax, financial, management, forensic and international accounting. Therefore, what better way to conclude the list than auditing itself?
FAQs
- What type of accounting is used in business?
Ans- Although there are multiple types of accounting included in a business, but the most used ones include cost, managerial and financial accounting.
- What are the different types of accounting?
Ans- There are 7-8 main types of accounting which are essential to a business, including international accounting, governmental accounting, forensic accounting, and much more.
- How many types of accounts are there in business?
Ans- There are three main types of accounts in a business- real, personal, and nominal.
- What are the two main types of accountants in business?
Ans- There are many types of accountants in business, including Certified Public Accountant, Management Accountant and many more.
- What are the three types of accounting, and why do they matter to your business?
Ans- Accounting helps track the costs, finances and managerial expenses of a business thus making it crucial for a business or organsiation.