Starting a small business in Tauranga is a daunting task. There are so many things to think about and keep track of, from finding the right location to hiring the right employees. One of the most important aspects of starting a small business is keeping track of your finances. This is where bookkeeping, accounting, and advisory services come in.
Small Business Book-keeping
The first financial service we will be discussing is bookkeeping. Bookkeeping is the process of recording financial transactions, such as purchases, sales, receipts, and payments. The purpose of bookkeeping is to provide a record of all financial transactions that can be used to generate reports, such as income statements and balance sheets.
Transactions are typically recorded in a ledger, which is a collection of accounts. Each account tracks a specific kind of transaction, such as sales, purchases, expenses, or income. The purpose of bookkeeping is to provide a record of all financial transactions, which can be used to generate reports and make decisions about the business.
Transactions are typically recorded chronologically, making tracking trends and identifying patterns easily. Bookkeeping is typically done on a computer using accounting software, but it can also be done by hand. There are many different bookkeeping methods, but the most common is double-entry bookkeeping.
This method uses two accounts for each transaction, one for the debit side and one for the credit side. The debit side tracks assets, such as cash and inventory, while the credit side tracks liabilities, such as accounts payable. The double-entry bookkeeping method is considered to be the most accurate because it reduces the chances of error.
Bookkeeping is important for businesses to track their financial performance and make informed decisions about their money. Without accurate bookkeeping, it would be difficult to know how much money the business has, its expenses, or how much profit it makes.
Accounting for Tauranga Small Businesses
Accounting is the process of interpreting, classifying, and summarising financial transactions to provide helpful information in making business decisions.
An accountant’s job within a small business can vary; however, generally, an accountant is responsible for maintaining financial records, preparing financial statements, providing advice on financial matters, and reporting irregularities to the manager.
The purpose of accounting is to provide useful financial information in making business decisions. Financial statements are the primary tool used by managers to make decisions. The three most important financial statements are the balance sheet, income statement, and statement of cash flows.
The balance sheet shows a company’s financial position at a specific point in time. The income statement shows a company’s profitability over a specific period. The statement of cash flows shows a company’s cash inflows and outflows over a specific period.
The income statement is a financial statement that shows a company’s profitability over a specific period. The income statement includes information about revenues, expenses, and net income.
The statement of cash flows is a financial statement that shows a company’s cash inflows and outflows over a specific period. The statement of cash flows includes information about operating activities, investing activities, and financing activities.
The Generally Accepted Accounting Principles (GAAP) are the rules that govern financial accounting. GAAP is developed by the Financial Accounting Standards Board (FASB). These principles are the basis for accounting and must be followed, especially in New Zealand.
Advisory services for small businesses and startups in Tauranga typically include financial planning, business planning, and marketing advice. The purpose of advisory services is to guide and assist small businesses and startups to help them grow and succeed.
Some examples of advisory services that an accountant in Tauranga could provide include:
- Tax Planning: Offering advice on minimising taxes and maximising tax breaks.
- Business Planning: Assisting with the development of business plans and strategies.
- Financial Planning: Helping to create long-term financial plans and goals.
- Retirement Planning: Working with clients to plan for a comfortable retirement.
- Estate Planning: Offering guidance on how to best manage and distribute assets.
- Risk Management: Identifying and helping to mitigate risks that could impact a business’s or individual’s financial health.
Accountants who provide advisory services must have a deep understanding of the organisation’s financial situation and be able to offer advice that is tailored to the organisation’s specific needs. They should also have a deep understanding of accounting principles and practices and use this knowledge to provide insights and recommendations to their clients.
So What are the Key Differences Between the Three?
It is evident that bookkeeping, accounting, and advisory services are critical for the success of any small business. These services provide the necessary financial oversight and guidance to ensure your business is financially on track. Without these services, it would be difficult to manage your finances and make sound decisions for the future of your business. If you are considering starting a small business in Tauranga, consider these services essential to your business plan. Talk to us now at Auctus for all your bookkeeping, accounting and advisory services.
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