Why You Should Be Picky in Hiring a Private Equity Accounting Firm


Accounting is a craft one must learn to love. Not only does it require one to have an impeccable eye for detail, but it also requires an undying commitment to accuracy. Given this, you can never assume that everybody is bestowed with the gift to be an accountant. As the famous saying goes, “many are called, but few are chosen.” This explains very well the zeal of these professionals.

Hiring a Private Equity Accounting Firm
Hiring a Private Equity Accounting Firm

All the more, you need the expertise of accountants if you have private equities to manage. Hiring a firm that specializes in private equity accounting services can relieve you of both legal and financial woes. Before you can make money in the private equity industry, you need to work with an expert private equity trader. These professionals help their clients execute portfolio oversights and deals. Aside from that, they also help leverage venture capital investments and buyouts.

A specialized branch of Accounting

To be a full-fledged accounting practitioner, one must pass the licensure examination. However, because of the complex nature of a private equity investment, the accounting firm and accountant that will work with you need to adhere to both the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB).

On top of that, since the existing accounting standards were not explicitly drafted adhering to private equities, you need to work with someone with relevant experience in private equity funds.

To top it all, some variances must be considered, like the private equity funds’ terms, the company where such funds will be invested, and the investors’ needs when it comes to financial statements. All these varying requirements and factors all lead to the importance of working with a private equity firm with relevant experience and industry exposure.

You cannot hire just anyone

Accounting is a wide array of related branches. It is not one discipline juxtaposed into one single criterion. To name a few other branches, you have Financial Accounting, Management Accounting, and Financial Management.

Financial accounting deals with preparing financial statements, profit and loss analysis, and balance sheets. Management Accounting, on the other hand, deals with strategies on how a comptroller, business operations manager, or owner makes sound business decisions based on the documents prepared by Financial Analysts or bookkeepers. Lastly, financial management deals with the strategies in increasing profits and finances in general, for the business.

Given these different branches of accounting, it is a must that the business owner chooses the right accountant to do the job for him. If he wants somebody who can audit his financial statements or come up with one, he must contract the services of an expert in Financial Accounting. If he needs somebody to expound on strategies his business should employ to gain the most pecuniary benefits, he must then hire an expert in Management Accounting. But if he needs someone who can manage his private equity and all his unpublished investments, he must work with a company offering private equity accounting services.

The takeaway

The moral of the story is always to know what you need. Remember that your investment and finances are at stake here. You must take calculated risks to make the most out of your investments. While wrong decisions can be corrected, they should be avoided. Know the right person for the job, and rely on his sound judgment. You and your business will surely be soaring to greater heights if the one you choose gets the job done.

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Frank Malone

Frank Malone is a Digital Marketing lead generation expert and the founder of viraldigimedia and viraldigimedia.com one of the fastest-growing digital marketing and link building agencies. He has over 5 years of experience helping digital marketing, seo, finance, business, marketing companies acquire more clients through quality lead generation. You can connect with him via email contact.viraldigimedia [@] gmail.com