Corporate accounting is a branch of accounting that focuses on accounting for companies (Whether Public or Private), preparation of financial statements and accounting for one time events like mergers, acquisitions etc. This branch of accounting ensures that accounting is done as per the prevalent laws, rules and regulations. It is way different than management accounting and it has its own role in the development of your business.
Your company can really benefit from corporate accounting, provided you know why you need it. If you are a startup who’s looking to manage its finances then it’s high-time to invest in services or personnel who can handle the hard work for you.
However, before you do so, here are a few advantages and limitations of corporate accounting to help you make a concrete decision before you decide to hire someone.
Let’s Get The Limitations Over With First
Accuracy of the data may go wrong in GIGO
All corporate accounting is done on some or the other software. Whether it be Tally, SAP or Busy, it is a software where a person will key in data. Softwares work on the principle of GIGO. Thus, if someone feeds the wrong information, the result will surely be faulty. One needs to understand that the accuracy of the output is fully dependent on the quality of the input and nothing else.
You need an experienced accountant for the job
It is a much higher level of accounting and you need experienced accountants for the job. Inexperienced accountants might make mistakes and the end result will not be satisfactory. Thus, you need to get experienced accountants onboard which, make no mistake, will cost you. And more often than not, will cost you a bomb.
Only numbers, no insights
It majorly deals with quantitative data and numbers. Hence, it becomes difficult to interpret the qualitative aspects of your business. For this purpose, people have to hire management accounts to decipher reports and break down numbers to give insights which becomes an extra cost.
Let’s Look At The Positives, Shall We?
Know your financial health
Want to know how much money you made? Want to know the growth in your sales? Corporate accounting will give you a thorough breakdown of that. It will show you your income, expenses, cash flow, investments, assets and liabilities and so on with reports and statements. With this, you will get an overview of your business’ financial health.
Understand sales trends
Sales and margins data is incorporated in real-time. With all your data in one place, it becomes easier to understand the sales trend of our business. These figures can throw out your financial health in minutes if not seconds.
Ensures legal compliances
Corporate accounts maintain your business’ financial records to ensure that it meets the necessary compliances, laws, regulations and company’s internal policies. These records can also be circulated internally to help executives make financial decisions.
Get an overview of your business in real-time
Want to understand how your business is doing in real-time? Just turn to your corporate accounting data. You can get a lot of insights looking into the numbers and take decisions based on them in real-time. With the help of data, you can understand where you can optimise and which areas may require improvement.
In the age of cut-throat competition and the boom of startups, it’s important for any firm to stay competitive and be on its toes 24×7, no matter the size of the company. Hence, if you are just starting out your business with a limited budget, then hiring a corporate accountant or a management accountant can be expensive. Outsourcing accounting to industry experts would help you to save a lot of costs and time.
At Business Guru, we understand how difficult and expensive it is to hire the right accountants for your Business. It’s a nightmare to interview, train, retain, rehire the right accountants. We have created Accounting packages to save both your time and money! We are a firm full of CAs and MBAs who have the right expertise to help you maintain your records and analyze your data to give you actionable insights.
If you need any help managing your books, don’t hesitate to get in touch with us for a consultation! You can contact us here