Differences between Accountants, Bookkeepers, and Financial Consultants

Entrepreneurs and small-business owners wear a lot of hats, but hiring an accounting firm can ease some of the load and allow more time to focus on core business strategies. These firms offer a wide range of services, from basic bookkeeping to more complex issues, such as tax returns and audits. Outsourcing such tasks to specialist firms is often also lot cheaper than getting them done in-house.

There are three broad avenues in which Accounting Firms operate in – Accounting, Consulting & BookKeeping.

Accounting

High-level accounting services are typically offered by certified professionals employed by accounting firms. In particular, these are the areas focused on:

• Public Accounting - Professionals work in the areas of audit, tax and management consulting. Four firms, called the Big Four, are the largest companies in the public accounting industry. These are EY, PWC, Deloitte and KPMG. Public companies hire these and other firms to complete accounting tasks required by regulators. Regional and local accounting firms handle auditing and other accounting tasks for regional and local clients, e.g, Accounting Firms Denver in Denver, Colorado.
• Tax Accounting - Tax accounting firms focus on tax preparation and planning for companies of all sizes, and also for individuals. The Internal Revenue Code establishes tax laws for individuals and businesses. These laws differ from Generally Accepted Accounting Principles (GAAP). Many tax accounting firms require their employees to periodically take continuing education courses to stay abreast on changing tax laws, accounting software and tax planning strategies.
• Forensic Accounting - Forensic accounting firms use accounting skills and legal policies to uncover fraudulent and illegal activities. Public and private companies hire forensic accounting firms to investigate financial records. When an employer or federal agency takes legal action against individuals involved in corporate fraud, the courts may call upon forensic accountants to testify as expert witnesses.

Consulting

In addition to routine tasks, denver accounting firms also advise clients on financial and business strategies. They might provide advice on methods for lowering a client's tax burden, review and make suggestions for updating a business plan or even helping firms out with putting in place the best and most effective IT & IS Systems. Some firms specialize in risk management, while others focus on managing financial investments. They also ensure all clients are aware of regulatory changes. In recent years, consulting arms of leading professional accounting firms have grown exponentially, with growth coming in equal numbers from the developed and the developing world.

Bookkeeping

Bookkeeping firms complete fundamental accounting tasks for small and medium-sized companies. No certification is required for bookkeepers, although they may seek certifications. Bookkeeping firms are usually small companies with only a few employees. Services provided by bookkeeping firms include accounts receivable, accounts payable, bank reconciliation, credit sales reconciliation, financial statement preparation and preparation of accounting write ups. Additional services offered by bookkeeping firms include payroll, small business tax preparation and loan package preparation. Bookkeeping firms may handle clients' basic accounting tasks before submitting the information to CPA firms for more complex tasks.

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