m+a Accounting & Consultancy

Corporate Accounting Services: Why Are They Needed?

Corporate accounting allows businesses and corporations to evaluate their current financial status. It also helps their policymakers to formulate policies that will boost the corporation’s financial growth. As such, corporations usually have an in-house accounting services department or hire the best accountant in Sydney to handle corporate accounting on their behalf. 

What Is Corporate Accounting?

Corporate accounting is a type of bookkeeping that corporate entities undertake to assess and determine the corporation’s financial standing for a particular period. Typically, this involves various procedures, including preparing balance sheets, cash flow statements, financial records and many others. 

Corporate accounting is regarded as a functional tool used to analyse a number of business activities by corporate entities, such as the creation, absorption and amalgamation of their consolidated documents.

However, unlike the conventional version, corporate accounting services are dedicated to a company’s financial operations. A corporate accountant’s only concern is the firm’s financial records.

What Are the Five Purposes of Accounting?

Most of the largest and established corporations invest a lot of resources to gain access to corporate accounting services because accounting plays a crucial role in monitoring their firms’ financial health. Accounting is needed for the following purposes.

1. Systemetically Records All Business Transactions

Having a complete and systematic record of all the company’s business transactions allows the management to retrieve information when the need arises. In most cases, large businesses hire an independent accounting services provider to record all these transactions in the company’s books of accounts. 

2. Facilities Financial Reporting

Corporate accounting is also used for financial reporting. A systematic report allows corporate entities to effectively present the financial information to stakeholders, investors and creditors. Accounting is also needed to record, track and analyse all financial information to improve the company’s existing operational policies.

3. Ascertains Profit

Corporations do business to earn profit. So, corporate entities usually subject their businesses to accounting to make sure that their business operations are making the expected profits. Typically, accountants are tasked to look into the company’s financial records and create a report that will reveal if the business is earning a profit over a particular period or not. The report’s findings will then be used as a guide for making business decisions.

4. Determines the Company's Financial Position

Corporations regularly require their accounting services arm to prepare a balance sheet that shows the company’s latest assets and liabilities. To determine if the company is in an excellent financial position, the accountants usually compare the resources owned by the business (assets) and the claim against these (liabilities). When the value of the assets exceeds the total liabilities, it simply suggests that the enterprise is in an excellent financial situation. If otherwise, this could mean that the enterprise is losing, and there is a need to implement corrective measures to revert the company’s current financial position.

5. Commnicates Financial Information to Different Users

Finally, corporations need accounting because this helps them communicate the firm’s latest financial information to the management, shareholders and investors. These financial documents include cash flow statements, annual reports and many others. 

What Are the Steps Involved in Corporate Acconting?

1. Creation of the Company's Accounting System

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2. Staff Payroll Processing

The company’s accounting services may also take charge of processing the staff salaries. Accountants calculate each employee’s wages for a specific work period.

3. Special Expense Management

The corporate accounting department also handles the payment of special expenses that the company should pay to comply with the business norms.

4. Handling of Accounts Payables and Accounts Receivables

Finally, the company’s accountants are responsible for receiving and processing all incoming invoices, such as electronic payments and bank transfers. They also handle bad debts and overdue accounts. 

Why Does a Corporation Need Accounting Services?

As far as corporations are concerned, having a reliable corporate accounting services provider that handles the financial aspects of the company is very important. Aside from helping their policymakers in creating policies to further the company’s interests and other related decision-making tasks, corporate accounting services also make the following possible.

  • Communicate with the stakeholders the most recent status of the company’s assets and liabilities
  • Ensure that all the firm’s business and operational undertakings are compliant with the rules and regulations set by the applicable governing bodies
  • Come up with comprehensive financial reports that the company’s policymakers could use in making strategic decisions
  • Assess if the company’s latest accomplishments and procedures are in line with its organisational policies
  • Evaluate the financial performance of the business
  • Assist in creating the budget and future projections
  • Help in the filing of financial statements

Every corporation badly needs systematic accounting services for them to survive. This is because having access to proper accounting services provides companies with the information that helps them accomplish the following.

  • Create and monitor the corporate budget
  • Monitor the company’s business expenses
  • Track the company’s financial condition 
  • Improve the company’s management procedures
  • Facilitate the regularly needed audit
  • Assist in formulating future business decisions
  • Ensure the company’s compliance with the law

How Malkoun & Associates Can Help You

Having a competent accounting services provider is crucial for every corporation, business or company. Such professionals take charge of the processing of financial reports and almost everything that concerns the company’s financial aspect.If you want quality service from the most proactive, efficient and professional accountancy firm in the country, contact us at Malkoun & Associates. We offer a wide range of accounting and tax services, including preparation of financial statements, tax consolidations, employment taxes, acquisitions and due diligence review, tax minimisation and more. With our wealth of experience and knowledge, we assure you nothing but the best services.