Dec 14 It Takes All Kinds…

Most of us aren’t accountants. Unlike accountants, most people didn’t enjoy math class. Most people, in fact, dreaded the time of day when it came time for math class or math homework. Math tests are a source of anxiety for kids of all ages, from grade school through college. If these people don’t have a family member or friend who is an accountant or works with numbers, the idea of enjoying working with numbers can seem to be a strange and foreign concept.

 

But they are out there! In fact, a surprising number of people prefer working with numbers. And these people are exceedingly useful in all aspects of business, since so much of any business’s success, depends on successfully working with numbers. As a result, it makes perfect sense, though it might not to the other segment of the population that seeks to avoid math at all costs, that there are many different types of accounting, each with its own area of expertise. Even for those who aren’t considering going into the field of accounting, an understanding of the different areas of accounting expertise can come in handy. If you aren’t a person who enjoys math, yet you want to run a successful business or even have success with your personal finances, you’re going to need a good accountant. This list of the different types of accounting will help you begin to find the accountant that will best be able to work with your personal situation.

 

Financial Accounting

 

 

Financial accountants, as their name indicates, work with the process of producing financial statements. Businesses and individuals use financial statements to inform outside parties of their financial situation. These financial statements generally follow a template of commonly accepted indicators of an entity’s financial status. Thus, an understanding of this template and the commonly accepted standards by which financial status is measured is crucial to the job of a financial accountant. Financial statements indicating a company or individual’s past and current financial performance may be presented to a wide array of entities including the government, tax professionals and potential clients and investors.

 

Management Accounting

 

Whereas financial accountants generally prepare financial statements for external use, management accountants produce financial information that is used primarily for internal use. Financial questions relevant to a company or individual, such as budgets, forecasts, and other projections are the primary domain of management accountants. The reports they produce are not usually primarily necessary to outside sources, and they often help a business analyze the past and set goals for the future. As is true of each of these broad types of accounting, there are several branches within management accounting. Cost accountants, for example, are a type of accountant that focuses on the financial techniques involved in monitoring and controlling costs. These accountants are used heavily in manufacturing. For each sector of business and finance, there may be an accounting specialist trained to work specifically in that field.

 

Governmental Accounting

 

Governmental accounting is also referred to as public accounting or federal accounting. In contrast to the previous types of accountants, who work in the private sector, government accountants work in the public sector. Government accountants are needed because the financial goals of a public organization, such as a government agency, are different than the financial goals of a private business. Not only are the goals different, the rules of financial practice in the public sector are often very different than the rules in the private sector. The accounting rules for government accountants may even vary greatly from state to state or from municipality to municipality, meaning that finding a government accountant who specializes in the accounting practices relevant to your situation is very important.

 

Other Types Of Accounting

 

Other types of accounting include forensic accounting, project accounting, social accounting and tax accounting, among others.  A Clifton NJ accounting firm will be able to help you hone in your specific accounting needs.