Table of Contents

• Understanding the Basics of Accounting
• Bookkeeping vs. Accounting
• Essential Accounting Principles
• Leveraging Accounting Software for Your Business
• How Professional Accounting Services Propel Business Growth
• Accounting Services Tailored to Your Business Type
• Partner with Bluestone Advisory Limited Today

Understanding the Basics of Accounting

Accounting is the systematic process of recording, analysing, and interpreting financial transactions. It provides the basis of strategic decision-making and provides insights into operational performance, financial health, and growth potential.

Definition and Importance

Accounting involves a wide range of activities essential for business success, from bookkeeping to preparing financial statements, ensuring tax and filing compliance as well as strategic decisions and planning.

Bookkeeping vs. Accounting

Bookkeeping is a subset of the accounting process that relates to the process of recording, classifying and organizing financial transactions that occur within a business. Check out our informative guide “What is bookkeeping?” that outlines the bookkeeping process.

Accounting also follows on from the bookkeeping process by interpreting, summarising and analysing the recorded financial data to provide insights of a business. This could be in the form of management accounts, annual statutory accounts as well as for taxes such as corporation tax, VAT or Self-Assessment tax returns.

Without reliable bookkeeping as a stable foundation the rest of the accounting process can suffer and may not provide the value added that your growing business needs.

Essential Accounting Principles

The Foundation of Financial Reporting

Having a systematic method of using double-entry system bookkeeping to record, classify and store transactional data on a regular basis is crucial for sound financial management. This is often the first point at which potential financial problems can be first observed and should be reported for a swift, appropriate resolution.

Leveraging Accounting Software for Your Business

Accounting software helps streamline the bookkeeping process and store financial information. These software include Pandle, Xero, Sage, and QuickBooks and nowadays are cloud based which allows for easy or remote access.

Analysis to monitor and review progress

Once the transactional data is recorded and classified, it can be used to analyse performance, such as sales volumes, profit margins and/or other key performance indicators (KPI’s) that are important to your business. This can highlight trends that are opportunistic or threats to the growth of the business.

Ongoing reviews and analysis help provide quicker insights into areas of the business. Regular insights into industry specific as well as wider analysis also is important to the success of businesses.

Strategic decision-making for sustainable long-term success

Good decision-making requires accurate, timely information from the accounting process.

How to allocate and devote business and staff resources going forward and how to expand business or select projects are important business decisions that take place. These can make or break your business. Calculating or implementing a framework to determine the risks and rewards are valuable to business owners which an accountant can assist with.

How Professional Accounting Services Propel Business Growth

Do I need a bookkeeper or accountant?

A bookkeeper can assist with the data collection, recording and classification of business transaction and some of the areas of the accounting process but are unable to assist or advise on tax and accounting compliance. They are also unable to assist with business development, planning and decision-making for growth.

Qualified bookkeepers are usually members of the Association of Accounting Technicians (AAT) who require that ongoing development and training take place for their qualified members.

An accountant can help at every stage of the accounting process. Qualified accountants are members of accounting bodies, such as Association of Certified Chartered Accountants (ACCA); the Institute of Chartered Accountants in England and Wales (ICAEW) or Chartered Institute of Management Accountants (CIMA). These bodies require ongoing training and development of their members.

Accountants can be helpful:

• to design and tailor the bookkeeping process and software that fits your needs
• to help develop methods to make the process efficient and seamless within your everyday business activities.
• to advise and put in place methods to identify or reduce financial risk.
• to train staff with bookkeeping and using the accounting software.
• to troubleshoot accounting software problems
• to review and analyse financial performance as well as monitor relevant Key Performance Indicators (KPI’s) for your business.
• to highlight areas of financial strengths, weaknesses, opportunities and threats (SWOT analysis).
• for financial forecasting, budgeting and planning for short-term and longer term business development.
• to ensure timely, accurate accounting and tax compliance.

The Role of an Accountant in Your Business

Beyond Numbers: A Strategic Partner

Accountants provide expertise that help ensure tax and accounting compliance but also serve as strategic advisors that offer insights on growth opportunities, tax planning, and financial efficiency to help your business grow and prosper.

A good accountant will be able to provide tailored expertise for your business to help it grow, sustain and prosper.