Finimpact

Frequently Asked Questions (FAQ)

What is Cash Basis Accounting?
The cash basis is excellent at monitoring the actual cash available. Expenses and revenues aren’t carefully matched on a month-to-month basis. Expenses aren’t recognized until the money is paid out, even if the expenses are incurred in previous months, and revenues earned in previous months aren’t recognized until the cash is received.
What is Accrual Accounting?
With this common method of accounting, expenses and revenue are matched, providing a company with a better idea of how much it’s spending to operate each month and how much profit it’s making. Expenses are accrued in the present month, even if the cash isn’t paid out until the month after this one. Revenues are recorded in the month the project is complete or the product is shipped, even if the company hasn’t yet received the cash from the customer.
What Is Cost Accounting?
Cost Accounting is most relevant for manufacturing businesses. It is a method of internal accounting that does not have to adhere to the Generally Accepted Accounting Principles. It is used so that management can determine how to make better decisions. Due to this, there are many different kinds of cost accounting, depending on what kind of industry the business is in. Cost accounting is more relevant to businesses in manufacturing, producing physical items. Yet other businesses may have their version of cost accounting.
Should I Hire a Dedicated Accountant?
Unless you have more than 100 employees, then you do not have to need for an in-house accountant. What you can do is work with a good accountancy firm on an as-needed basis. It can be useful to work with a good accountant, especially if you are taking in significant revenues. It’s just that you do not have to hire a full-time accountant anymore. Just get high-quality software providers and consult an accountant a couple of times a year, or when it is time to file.
How Do I Select the Right Accounting Software?
Before you select any software, you should make a list of what exact features you are looking for and how many clients/vendors you are working with. It might be a good idea to look for an accounting/payroll hybrid system. In this manner, you can seamlessly complete two formerly separate tasks. The payroll will allow employee self onboarding, time tracking, employee withholding, and benefits deductions, as well as automatic tax filing. The accounting system will allow vendor and inventory management, budgeting, sales forecasting, balance sheet analysis, and more. Price should not be much of a consideration. Most of the accounting software providers are similarly priced, with various tiers to cater to what you are looking for. Lastly, always look to social proofs to determine whether a provider is reliable or not. Accounting errors can be costly if you cannot talk to an agent fast.