Bookkeepers can perform three different types of accounting: general, analytical or budgetary accounting. Even though only the former is legally required, all three will provide valuable insights into your company’s financial situation.
General (or financial) accounting
General accounting gives you a truthful picture of the financial health of your business. Documents such as the annual accounts will also help you outline a future-oriented policy and provide you with the necessary support in negotiations with external entities (banks, suppliers, etc.). This allows you not only to meet a legal obligation but also to help your company grow.
This form of accounting gives you more information on the expenditure and profitability of the different segments of your company. These include e.g. profit centres, cost centres and geographical sectors. An extensive cost analysis allows you to determine your profitability more accurately, and make better decisions as a result.
Budgetary accounting is used to look forward into the future, rather than focus on the past. Indeed, you set budgets for the next financial years, after which you will compare your estimates to reality. If there are noticeable discrepancies, a thorough analysis will be necessary.