The 5 most common misconceptions about accounting

Myths and misconceptions are often created out of a few bad experiences or even lack of experience with the field of accounting. And while there’s some truth in those statements, they are not the whole story. So let us clear things up by exposing some of the most common misconceptions about accounting.

  1. Accounting is the same thing as bookkeeping

Accounting and bookkeeping are two terms that are often used interchangeably because they both deal with financial data. They may seem to be very similar, but there are some striking differences between the two. Bookkeeping is the process of recording all financial transactions of a business, whereas accounting goes beyond just keeping accurate books. Accounting also involves interpreting, classifying and analyzing the past financial records of a business and using this data to make forecasts for the future.

  1. Accountants will solve all your financial problems

Accountants can certainly help by providing advice and clarity on certain financial issues, but their primary role is to ensure that your financial affairs are in order, you have the financial information you need to make informed business decisions and all important deadlines are met. Just because they are involved with your money, cash flow and revenue, it doesn’t mean they have control over where your money goes. You should think of your accountant as a valuable source of information and business performance, who will also have some useful suggestions to improve your business operations, but not forget that you are still the one in the driving seat.

  1. Only large businesses need the services of an accountant

All types and sizes of businesses have to track expenses, manage bills, pay taxes, manage payroll, create budgets, and an accountant can help with all of that. With the help of outsourced services, accountants can provide a variety of services to their clients at affordable prices and become an extension to internal teams. Often, it is SMEs that see the most value from outsourcing their accounting and financial responsibilities including increased profitability and meeting goals more quickly.

  1. Accounting only matters when taxes are due

The tax returns period isn’t the only time accounting matters. You generally need plenty of time to accurately file your taxes, but the process could be less painful if you follow accounting best practices and make tax-efficient choices all year round. Even if you can’t afford a professional accountant, you should constantly monitor and manage your finances so that you can keep your business running smoothly.

  1. Accounting is expensive

Lots of small businesses avoid getting professional accounting help because they think that they can do it themselves and it isn’t worth their money. However, the opposite is true as investing money in this side of the business can save time, money and potential headaches. With the help of an accountant, you can keep costs low, avoid non-compliance and late payment fees, as well as overpaying your tax.

Understanding your business’s accounting needs is fundamental to your success. If you have any questions or need a helping hand with your finances, feel free to contact us on +357 7000 8812 or info@predeevo.com.

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