Accounting is the lifeline of every business. It is the list of transactions that have taken place over a period of time and gives a clear picture of profit or loss at the end of every year. Business accounting concepts differ based on the size of the business. Small business accounting is very different from corporate accounting, as the amount of transactions and volume vary hugely.

The accounting concepts do differ from each other although the basics remain same in both forms. Here is the comparison of both the accounting concepts and how they can actually have an impact on your business.

Small business accounting

Most of the small businesses don't concentrate much on the accounting area as the business itself becomes more prominent than keeping track of it. However, the fact is that, accounting holds the key to the success of any business. A good accounting concept is required to drive the business without any hurdles and take care of timely tax filings. Gone are the days of manual accounting and today software has substituted the bulky record books.

The software takes care of your invoices, billing as well as keeping track of outstanding amount due from the customers. It makes life easy at the time of filing the taxes since all the information is readily available. Most of us feel that small business doesn't require such a tool and a traditional accountant will be able to do the job. However, the fact is that, the amount spent on the resource is more or less the same as that of the software. In turn, the software adds amazing flexibility, helps in generating various reports and is more secure.

Corporate accounting

Corporate transactions run into millions and considering a manual option for accounting is something beyond imagination. Accounting software will be required to track the cash in-flow, invoices, inventory and various other factors. Since the transaction amounts and volume will be huge, accounting software will be able to do the job of an accountant without any errors.

This also avoids the drudgery of huge calculations at the time of tax filing. The software ensures systematic maintenance of accounts as per the global standards. Unlike in the manual method, there will not be any scope for manipulation of accounts and therefore accounting software is considered as the safer concept for corporate accounting. An effective accounting concept is essential irrespective of whether it is small sized business or of corporate standard.