Top Tips For Contractors Seeking Accountants

SMEs and one man band companies need to make sure that their financial affairs are being dealt with by expert accountants. This kind of scenario is also applicable to all IT contractors and freelancers. Like all other businesses, they must also sign up with a reputable, specialist accountant that will handle their financial and accounting needs.

Dealing with numbers and vat and payroll issues is not the job for an IT contractor and it is not part of their expertise. They may have the depth of knowledge to deal with financial issues and paper work but instead of dealing with it, it is better to hire a reputable accountant to do all this for them.

Here are some of the tips that contractors can consider in looking for an accountant.

First of all, make sure to hire specialists. Before looking at anything else, you need to look for a team of specialist contractor accountants. Of course, you will most definitely want to hire an accountant that understands tax issues involved in a contracting business. You should look for firms who dealing with the contractor /freelance market.

Second, look for additional services that they offer. Like any other businesses, accountants for contractors also offer packages to their clients. This may include things such as completion of your annual self assessment return and IR35 contractual advice. If you are just about to begin your contract, your accountant can also help you with some issues in setting up your own company. They can help you register for VAT and any other services that will require their expertise.

Third, check the fees they are charging. Usually, contractor accountants may provide a complete accountancy service for a fixed monthly fee. However, you must fully research the services that the packages includes. Make sure that the amount that you will pay will be equal to value of the service that they will provide. Usually, the monthly packages include dealings with the tax authorities, PAYE and NI calculations, completion of TAX returns and year-end accounts.

Fourth, you must give some thought to their knowledge of tax legislation. They must be knowledgeable of IR35, managed service companies and income shifting since each of these issues has a big effect on the majority of contractors.

Fifth, you must consider the services that they provide. Like what is mentioned earlier, you must be aware of the services that they provide. You can contact several contractor accountants and find out about the services that they provide. You can compare the services that they provide including the fees that they incur and select the best contractor that will suit your needs.

Sixth, give some thought to personal recommendations. Among the other tips, this is the best way to look for a good firm of contractor accountants. With the help of other contractor colleagues, you can find the best accountants that can help you. They already have experience in dealing with them and you can be sure that they can provide the services that you need based on the testimonials of your colleagues.

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What Is The Difference Between CPA and ACCA?

There can often be confusion about the various classifications which accountants can have and the meaning which they have. There are various terms used from charted to uncharted, CPA, ACCA, CMA and ICAS to general public the world of accounting can be an extremely confusing one. No matter what the qualification you will always get good versions and bad versions of accountants with the same qualification. However to keep things simple the best solution when it comes to choosing an accountant is to base you decision upon personal recommendations or based on the past performance of the account/accountant agency.

The terms CPA and ACCA both involve a qualification for professional accounting. CPA stands for Certified Public Accountant while ACCA is an abbreviation of the Association of Chartered Certified Accountants. The most obvious difference between these two terms is their origination with CPA originally being established in America and ACCA being based in the UK. CPA started in the 1800's with all applicant required to pass an entrance exam set by the American Institute of Certified Public Accountants (AICPA). Applicants are also required to have relevant work experience in order to be awarded the CPA certification. This award is generally quite a broad certificate covering everything from taxes to auditing. Holders of these qualification are often found throughout the industry and also in house within organisations. This is opposed to holders of an ACCA certificate who are often found within accountancy agencies.

Even though the ACCA is established in the UK it now holds members worldwide. To become a full member applicants must complete and pass an entrance exam and hold a minimum of 3 years relevant experience in the industry. The entrance exam for these certificates vary widely with the CPA exam covering areas including auditing and attestation, financial reporting, accounting and regulation as well as aspects such as business environment and concepts. In stark opposition the ACCA certification is divided simply into two areas. These are fundamentals and professional with fundamentals covering knowledge and skills required with the professional section covering essentials and options applied in accounting practices. It is obvious that there is a lot of confusion and difference in opinions when it comes to the world of accounting and the terminologies used. As a result additional agencies have been established such as the Institute of Chartered Accountants of Scotland (ICAS) whose purpose is to find a resolution to the Principles versus Rules debate within international accounting standard setting. As technology improves and businesses expand there are increasing merging of boarders between practices and countries. With this in mind it has now become for all accounts no matter their qualification to grow with the industry and become not only multidisaplined but also increasingly aware of the variations in practices across the world.

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Accounting in Romania

Consider this article as a language course. At the end you should master speaking Romanian accounting. I'll try to turn it from a rather dull and technical language into an easy to follow method of staying on top of things.

I will help you get answers to a few basic questions related to understanding what the accounting numbers mean in Romanian. The tutorial is about reading one of the most basic accounting outputs - the end of month trial balance.

Accounting gives answers to many questions, but the crucial ones are:

• What is my turnover?
• Is the business making profit?
• How much money do I have?
• How much money do I have to pay in the short run?
• How much money do I stand to receive in the near term?

If you are doing business in Romania or you are considering doing business in Romania, it would probably be a wise thing to be able to answer these basic questions and understand how your business is performing.

Financial statements are prepared in Romania only twice a year, so if you want to have timely information, you should learn to read a trial balance. A trial balance is prepared at the end of each month, but be warned - accounting is just another form of studying history so what you get at any time is at best the last month's figures.

The Romanian format of the trial balance usually has 4 columns, each divided into 2 sections: Debit and Credit. Think of it in the following way, the balances on the debit side show the company assets, meaning the things the company spent its money on, while the balances on the credit side show where the company got its money from.

The first 2 columns of the trial balance reflect the initial balances of your company's accounts, the next 2 columns the monthly movements, the next 2 reflect the year to date movements including the initial balances while the last 2 columns show the ending balances of your company's accounts.

The trial balance is a collection of all the accounts used for recording the business transactions, divided into classes. In Romania, each account is given a number and it's not uncommon for accountants to speak only in terms of the account numbers, making your life more complicated.

However, if you know a few numbers, you can sort it out eventually. I'll point out the numbers that best answer the key questions.

Accounts starting with the number 7 point out revenues and accounts starting with number 70 point out sales, so if you want to know your total sales sum up the accounts starting with 70 and this should be your turnover. So we can tick question no. 1.

One important aspect concerning the Romanian accounting regulations is that we move the expenses and revenues to profit and loss at the end of each month, so a Romanian trial balance will never show balances for the expense and revenue accounts, that is class 6 and 7 accounts. If it does, that means you either have an incomplete or an incorrect trial balance.

Now, for question no. 2, "Is my business making profit?", simply check account 121 which is the Profit and loss account. If its balance is on the credit side that means your company is making profit, if the balance is on the debit side that means your company is making losses. Another possibility to check whether the balance in account 121 is correct is to sum up all the accounts starting with the number 7 and subtract the sum of all accounts starting with number 6, on the year to date columns. 7 points out to revenues and 6 to expenses. If amounts in class 7 are higher than amounts in class 6, you should feel relieved - your business is making profit.

We can also tick questions no. 2.

Moving on, you want to know how much money you have on hand. That's simple - just check the ending balance column of the accounts in class 5 that show values on the debit side. The result should answer the question, unless you have been withdrawing money from your bank account for discretionary use and your accountant built up money in the petty cash account.

Accountants usually do that, it's not their fault - they simply follow the double entry rule (each transaction is recorded in two accounts - so if money is out from the bank account and you didn't tell the accountant where it went, your accountant will naturally assume that it's in the petty cash - that means you have the money available on you).

The next question is trickier because money you have to pay is spread into a bucketful of accounts (it should not be surprising as you have to pay a lot of people - suppliers, employees not to speak of taxes owed). To come up with the answer, check accounts from class 4 of the trial balance that show a credit ending balance. Usually all payables are registered here. You might also have some short term loans, so add up the amounts under the second column from right to left corresponding to the class 5.

The last questions I am going to take is about money that you stand to receive. Simply check class 4 again, but this time look for the accounts that show a debit ending balance. Those are the amounts the company is waiting to cash in.

That should wrapped it up! If you need a more detailed explanation simply give us a call and set up an appointment. We'll be happy to assist you, after all our motto is "Guiding your investment in Romania!"

Article Source: http://EzineArticles.com/?expert=Vigi_Radu

Accounting Made Easy

What is Accounting About?

Well, accounting sounds like a dry topic, extremely boring but is extremely important to understand and this is what will allow any business owners to take any important decisions in their business. Accounting expresses in figures and financial reports what your business is about and how good of a manager you are. This is it. No more. And this really is Accounting Made Easy.

And then of course, you need to understand the language that is being used to make sure that you are in line with whoever you are addressing and you are discussing your finances with.

See, what happens most of the times with business owners is that they are so busy with running their business that they forget to look at the most important part of the jigsaw: their finances. They leave it to their accountant. But guess what? Your Accountant is NOT your financial planner. He will just create your financial accounts based on the information you gave him. And his job is DONE!

So what you need to bear in mind is the following:

1. Whenever you think of your financial accounts, ask yourself the following questions: who is going to look at them? And what are they looking for? Here there are 3 categories of people who want to look at them

a. Yourself as business owners in order to make important decisions for your business and make more money. In that case have some Accounting 101 sessions might be helpful to grasp what you need to focus on in your business.

b. Lenders: whenever you want to apply for a business loan, they will assess your credit strength and will therefore for through your financial statements very thoroughly

c. Auditors: this is often for companies of a larger size, whereby auditing just means proof-checking that your accounts are correct and reflect the reality of your business. ]

2. The second thing you need to think about whenever you think of your financial accounts is to to think of them as the following

a. Your Income Statement or Profit and Loss Statement = Performance of your Business

b. Balance Sheet = Strength of my business and Funding Profile Stability

c. Cash Flow Statement = Cash Flow Management and Debt Repayment Capacity

It's that simple and really is Accounting Made Easy. Once you have these concepts, you have the big picture of what accounting is about and you are ready to go more in-depth into the details of your financial statement and use them to make more money. There are several options to learn accounting. I would highly recommend Accounting 101 which is to me the best formula to get an Accounting Made Easy version as you will have your questions directly answered instead of struggling with some academic books and feeling overwhelmed by them.

Business Finances Made Easy's mission is to help business owners getting an accurate understanding of their business finances. This will allow them to be able to discuss their business finances at any time with confidence and will help them to get additional funding on demand.

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