If you are looking to start a business in 2012, you should know that business accounting is one of the most important aspects of any business. Having a clear grasp of your costs, turnover and net profit will be critical if your business is to be successfull. That’s why hiring an accountant to look after your financials is a wise move.
There are two kinds of accounting that you need to know about; Cash Accounting and Accrual Accounting. Cash accounting is the time when accounting events are recorded and become tangible. In a nutshell, once you have provided your product or service, shipped it and taken payment, this is cash accounting.
Accrual accounting is an accounting method that measures accounting events in real time. If a customer agrees to your service and signs a contract or a purchase order, an accrual system or accounting registers that as a sale even if you do not receive payment for weeks or even months. This a is a more complex form of accounting but it does provide a more accurate measure of your businesses financial condition.
If you are a startup and need help with your business accounting, guildford accountants can help you.