Need Help With Accounting Questions? Expert Help

Need help for tough accounting questions?  Accounting strategies are varied in scope because of the unique nature of your business or personal finances.  One thing that is certain, regardless of the unique requirements of your accounting needs, a proactive approach to accounting issues provides you the guidance and insight to help your business not only succeed but thrive.

From a practical standpoint, accounting is the process of compiling, recording and measuring the financial information of your business.  The information derived from your accounting is the feedback that lets keep current on the financial health of your money matters.  Many people look to find help with accounting questions.

Some of the accounting questions end users ask are the following:

  1. What type of business and with what company shall I invest my money? Investors, employees and shareholders often ask this question. They use the information to know where to invest and to what kind of company can give them high returns for their investments.
  2. How much interest can be charged for money lent? Lenders often want to gain information from accountants to know the interest to be charged and the income they can derive from their investments.
  3. Customers often ask about discounts and percentages of interest in cases of installment purchases.  An experienced accountant can help you run the numbers on your considered investments.
  4. Suppliers inquire about computation of receivables and interest on overdue accounts.
  5. Government agencies want to know revenue collectibles and surcharges for late payments.
  6. Accounting for retirement – often people ask how much they will need to live on the way they wish based on expected rates of return and liquid capital available.

Professional accounting helps you to answer the tough financial questions vital to your financial success.  Cold hard numbers hold the truth; emotion cannot cloud real expenditures, income, profit and loss.  Accounting information is used by two kinds of people:

  1. External Users – these are the users that receive and analyze data provided by companies.  Examples of people asking these accounting questions are government offices particularly the Internal Revenue office and the business licensing office; prospective investors or lenders who want to know the financial standing of a business and also suppliers who want to approve the company if the company applies for a credit line.  The accounting information used by external users is typically referred to as financial accounts.
  2. Internal Users – these users have investments in the company or they derive income from the company.  The first are the owners; second are the employees.  The owners use accounting data to track the income producing capability of the company and to determine return on investment.  The employees use the data to know whether they have stability and security in their employers and also to know whether they can request a salary increase or added benefits.  The data used by internal users appears in the management accounts.

When professionals need help with accounting questions the accounting department is consulted or an outside accounting firm is brought in to help. The accountants are provided with financial information and statements to reveal the financial strength or weakness of the company.

Do You Know Your Financial Health?

There are 3 primary financial reports that contain data pertaining to a business’s financial health that an accountant will look for.  These are the following:

  1. The Balance Sheet – this financial report contains the following:
    • Assets of the company – all material assets of the company including fixtures, machinery, land, buildings, investments, cash and receivables.
    • Liabilities of the company – all debts, trade payables, notes, accrued expenses and even commissions earned by employees which are not yet paid.
    • Retained Earnings of the owners – all profits the owners have accumulated and cash put into the company to operate it.
  2. The Income Statement – this report contains the following:
    • Sales – all income sources recognized for a period and the cost of the goods sold.
    • Expenses – all monies disbursed for the operation of the business.
    • Net Profit or Loss – the net amount the company earned for a period of time or, the amount of loss if the expenses exceed the income.
  3. Statement of Cash Flows – this report contains the movements of cash during a certain period of operation.  This includes the amount of liquidity added/deducted from the cash in bank, the amount of earnings added to the capital and the amount of money invested or turned into another kind of asset (equipment bought, for example).

Through these financial statements – both you and your accountant can understand better the financial standing of your company or personal finances. The most common objectives in reviewing the accounting information are to be used in the following:

  1. Accounts Receivable Collection – accounting data as to how much is due from customers, how much has been collected and how much interest to be charged for unpaid accounts.
  2. Recording of Accounts – storing and posting accounts in proper order in books of accounts so that when the accountants need to be examined the accounts balances are handy & ready.  Are you accounting for your money flow properly?
  3. Summarizing of Accounts – getting the totals of all accounts to be compiled in reports called financial statements.  How is your business doing financially?
  4. Interpretation of Reports – the reports are interpreted in order to know if the company is sound and stable.  How healthy are your finances?
  5. Futuristic Planning/Prediction – the data on the financial statements can assist in future planning; whether the company can expand, open new locations, or buy new equipment.  What are your future growth projections?

Having the right information organized and available is the first step to answering the tough questions. For more help with accounting questions contact us for the answers to your toughest questions.

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