Sunday, November 6, 2011

Understanding the Three Types of Accountants and Which to Hire For Managing Your Finances

Accounting is a much more complicated task than simply balancing a checkbook. It generally involves a more detailed understanding of finance than the average individual is aware of. To some degree an understanding of economics can be helpful, but accounting remains a specialized field. As such, much like seeking a doctor or medical conditions, accountant should be sought according to their specialty. These specialties can be divided into three separate categories unique to each type application of their skill.

1. Personal Accountants: These are the types of accountant one generally takes their yearly income tax records to. They specialize in dealing with accounting on an individual level. Many of their services and advertisements are tailored towards personal use. If you are an individual seeking personal accounting assistance then you should consider a personal accountant.

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2. Small Business Accountants: This kind of accountant deals best with small businesses. This includes personal businesses. It is generally limited to businesses of not more than 20 to 30 employees. These types of accountants have specialized knowledge relevant to small businesses. In particular they are aware of the relevant local, regional, and national tax codes as they apply to small businesses.

3. Corporate Accountants: This is an entirely different type of accountant than those previously discussed. They are familiar with much larger businesses, generally in excess of 30 employees. Their specialties not only include the necessary accounting records specific corporate business structures, but also encompass familiarity with international trade and income regulations as they apply to corporations.

This is not to say that one accountant or an accounting firm may not be familiar with more than one type of accounting. While one accounting firm can manage many tasks, it is important to consider the specific area of specialization a given accounting firm is most suited to. 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 attempting to reduce expenditure by hiring a personal accountant, you will be making a mistake. It is likely that you will end up paying far more than you save in the event of any incorrect filings.

With this in mind it is important not only to consider the business you are hiring, but also to check their references. In the case of personal accounting you likely have friends or neighbors who are familiar with the accounting firm and can give you an honest reference. In the case of business, one simply need ask a supplier, vendor, or firm with which business is conducted. A direct and straightforward reference can usually be obtained.

Understanding the Three Types of Accountants and Which to Hire For Managing Your Finances

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