The 7 Main Types of Accounting + List of Accounting Services

Whether you want to hire an accountant for your firm or plan to pursue a finance and accounting career, it’s beneficial to know the different types of accounting and the services under them. Here’s a roundup of the seven (7 main types of accounting and how they can help you with your needs. 

Related: Here are 4 Accountant Qualifications That Companies Look For 

The 7 main types of accounting

Each type of accounting serves a specific purpose. To know which of these types are best suited for your entity, you must first understand their functions and how they can be applied to your daily operations.

1. Public Accounting

The broadest and most varied type of accounting dedicated to providing different businesses with a range of services. 

Becoming a Certified Public Accountant (CPA) is a major goal for most accounting graduates. For many accountants, a CPA license is like a badge of honor — something that brings them prestige and opens better career opportunities, not to mention the possibility of higher pay.

The benefits of becoming a public accountant are not only for accounting professionals. Business entities, in particular, can see financial improvements when there’s a competent CPA on their team.  

In essence, public accounting is the broadest and most varied type of accounting. To be a part of this practice, an accountant must have extensive knowledge of different accounting, business, and taxation concepts and how they can be applied in real life. This requirement shaped CPAs to be analytical of even the smallest details, a trait necessary for maintaining accurate financial information. 

“CPAs are among the most trusted professions,” an article from the AICPA & CIMA stated. Trained to be independent and objective in their work, public accountants can “help you protect your interests, listen to and address your concerns and, equally important, give you peace of mind.”

In what areas can public accountants help you then? Some of the duties you can expect include: 

• tax preparation and advice,  

• consultations in the areas of employee compensation and accounting system design, 

• audit of clients’ financial records, and  
• preparation and review of client's financial statements. 

To add, CPAs have unlimited representation rights before the IRS, which can be useful in case of an audit. 

2. Management Accounting

A type of accounting aimed at providing the management with financial data to aid decision-making.

Successful companies do not rely on luck nor gut feeling. Their growth hinges on multiple blocks of grit, hard work, and most of all, smart business decisions.  

And to make smart decisions, you need data. 

However, extracting meaningful insights from raw data requires expertise and a lot of work. 

To save you from the hassle, it’s best to work with management accountants.

Management accountants are primarily in charge of providing executives and their internal members with insights into an organization’s performance. In general, here’s what their responsibilities look like: 

• prepare and analyze financial data,  

• extract useful information from raw data, and  

• create actionable reports to assist key decision-makers in making critical strategic decisions. 

Aside from creating reports, management accountants also carry out tasks like asset management, budgeting, performance evaluation, and cost management.

They are also often involved in budgeting for the release of your new products and preparing financial data for your investors and tax authorities. 

3. Fund Accounting

A specialized type of accounting that focuses on the effective and proper allocation of funds.

Not all entities are concerned with making a profit. On the opposite side of the spectrum, some organizations are more concerned about using the right funds for the right initiatives. These are usually tax-exempt organizations like nonprofits, government agencies, educational institutions, churches, healthcare organizations, and the like.

To ensure these organizations are using their funds properly, they need fund accounting. 

Fund accounting, a niche type of accounting, is all about the accountability of funds. It tracks how funds are allocated and spent — and if they’re used to their intended purpose. This type of accounting is an absolute must for keeping everyone in check and staying compliant with reporting requirements.  

Accountants who wish to do fund accounting must learn its nuances. For instance, unlike traditional accounting, fund accounting deals with more revenue sources but isn’t concerned about making any profit at all. They also need to be familiar with both unrestricted and restricted (temporary and permanent) funds.

In general, fund accountants are responsible for: 

• recording the activities of a fund, 

• maintenance of full accounting and portfolio records, 

• bookkeeping,  

• preparation of financial statements,  

• Net Asset Value (NAV) calculations,  

• fee calculations,  

• tax support (e.g., preparation of 1099 INT and 1099 NEC), 

• asset and capital account reconciliations, and 

• reporting of daily investment portfolios to executives.   

On top of this, fund accountants are also in-charge of documenting the changes within an investment fund which serves as a basis for net asset valuation (NAV).   

Free Download: Level Up Your Investment Strategies: Back Office Fund Accounting Support for Fund Managers 

4. Governmental Accounting

A type of accounting that involves public accounting duties for government agencies.

Another nuanced type of accounting is called governmental accounting, which is instrumental in the accurate, transparent, and efficient use of public funds. Aside from instilling transparency and accountability, it also aims to support government officials in making informed decisions — thus, ensuring that revenues and expenditures are made according to the law. 

In the U.S., state and local governments must follow the accounting standards set by the Governmental Accounting Standards Board (GASB).

Like the Financial Accounting Standards Board (FASB) for private and public companies, GASB establishes financial and accounting standards for U.S. government agencies that adhere to Generally Accepted Accounting Principles (GAAP).

Governmental accounting also follows fund accounting principles to ensure that the allocation and use of funds are compliant with legal and regulatory requirements.

Governmental accountants are key players in maintaining public trust. As such, some of their duties include:

• resource management and financial planning, 

• development of accounting procedures for government agencies,  

• revenue recognition, and  

• expense management. 

5. Internal Auditing

An accounting function concerned with evaluating an entity's risk management, control, and governance processes.

Every entity requires check and balance to guarantee adherence with relevant laws and regulations. At the same time, it’s also necessary for building transparent and effective accounting practices.

But how do you know if your organization is compliant and follows good accounting practices? 

This is where internal audit comes in. 

Read Next: 5 Things You Need to Do Before an Internal Financial Audit 

Internal auditors review your entity’s financial management practices to check for mismanagement, fraud, and waste. To do so, they evaluate your budgeting, management systems, and operations for efficiency of performance with regard to laws and regulations.

These accounting professionals can also have different specializations, including:

• information technology auditing,
• compliance auditing, and
• environmental auditing.

Furthermore, when you have an upcoming external audit, internal auditors are essential in assessing each department’s compliance with their respective processes. This way, you'll have increased chances of getting a clean audit report containing an external auditor's unqualified opinion of your financial statements.

6. Sustainability Accounting

The practice of linking sustainability initiatives to company strategy.

Implementing and promoting sustainable practices is no longer just a marketing stunt for companies. As the global climate emergency becomes more alarming, governments are working on making ESG reporting a mandatory requirement.  

The Securities and Exchange Commission (SEC), for instance, adopted last year rules “to enhance and standardize climate-related disclosures by public companies and in public offerings.”

The IFRS Foundation’s International Sustainability Standards Board (ISSB) also issued its first two International Sustainability Disclosure Standards — the IFRS S1 and IFRS S2 — to serve as global baseline for sustainability disclosure. 

These developments place greater importance on practicing sustainability accounting in business.

According to the American Institute of Certified Public Accountants (AICPA), accounting for sustainability is the process of “linking sustainability initiatives to company strategy. It involves evaluating risks and opportunities; and providing measurement, accounting, and performance management skills to ensure that sustainability is embedded into the day-to-day operations of the company.” 

Because of its complex nature, it's best to work with professional accountants who can help you identify, measure, analyze, report, and assure physical and monetary information related to non-financial topics. 

7. Tax Accounting

An accounting specialization dedicated to all tax-related matters.

Your business structure determines the types of taxes you need to pay and how you pay them, the IRS stated. To ensure your organization remains compliant will tax rules, you need tax accounting.  

As the name suggests, tax accounting determines how much an entity owes in taxes. It aims to help you pay just the right amount of tax — not overpaying nor underpaying.

With this, tax accountants can help you: 

• prepare financial statements, tax returns, and tax reports, 

• plan and consolidate taxes, and 
• identify tax credits and deductions applicable to your business so you can lower your tax liabilities legally. 

Tax accountants are experts when it comes to claims and how to avoid paying tax unnecessarily. If you have any issues with tax or filing your returns, this would be your best bet. 

Different types of accounting services 

Different types of accounting are associated with different accounting services. Some of the most common services are as follows: 

1. General accounting

General accounting refers to basic accounting activities that aim to preserve the accuracy and integrity of your organization’s financial records. This activity is a must-have even during the early stages of your business. It includes services like payroll, bank reconciliations, monthly reports and closing of books, and other fundamental accounting tasks. 

2. Bookkeeping services

Bookkeeping involves basic tasks that small to medium businesses have to accomplish while working closely with an accountant to ensure the accuracy of accounts.  

Bookkeepers may update financial systems using financial accounting software or record hard copy financial information. Furthermore, accounts payable and receivable are commonly monitored as part of bookkeeping. 

3. Management accounting services

Management accounting focuses on collecting, analyzing, and interpreting financial data to help the key people within your organization in making sound decisions.  

If your business is growing, or is at the stage of scaling-up, getting a management accounting service can aid you in pursuing your business goals without going beyond your budget allocation. 

This function includes budgeting, forecasting, and trend analysis; cost allocation; cash flow analysis; product profitability analysis; price modeling; and strategic planning, among others. 

4. Tax support

This service is designed to assist your tax accountant in preparing financial statements and tax returns, creating tax reports, and consolidating taxes.  

Read also: Why Accounting Firms Need Accounting Back-Office Services 

5. Financial controller services

Financial controller services involve the management of various functions of the businesses; from assigning work, dealing with new clients and overseeing staff. Controllers may also perform various internal and external auditing tasks to ensure quality and efficiency of accounting work. 

Should you hire or should you outsource? 

In some cases, you’ll need more than one type of accounting in your business. This holds true the bigger your business becomes.

But do you need to fill each position by hiring an in-house employee?

The answer depends on the type of accounting you need.  

Roles that require in-person presence must be retained in-house. Internal auditors, for example, must be an internal employee since they need to work closely with the management.

Some roles, on the other hand, can be outsourced but should be retained onshore. For instance, tax accountants must be someone from your country and have the authority to prepare and file tax returns. In cases where your taxes become more complicated, you can then outsource tax support services later to offshore locations to maximize cost savings.

Meanwhile, accounting services that can be completed entirely through the cloud can be more cost-effective when outsourced offshore. This includes outsourcing services like general accounting, bookkeeping, audit support, and administrative accounting.  

To sum it up, combining in-house and outsourcing can be more strategic. Through this approach, you can continue to receive high-level accounting service from your in-house employees while ensuring all your back-end accounting support needs are being met. 

Accounting outsourcing in the Philippines

Looking for a credible outsourced accounting service provide from the Philippines? Consider D&V Philippines. With over 400 clients around the world, our roster of accounting professionals can address your wide range of accounting needs. Download our Outsourcing: How to Make it Work whitepaper below to know how you can get started. You can also message us if you prefer to discuss your needs directly with our accounting experts. 

This article was first published on 5 August 2014 and has been updated since then for comprehensiveness and relevancy. 

Last edited on: 21 April 2025 

Edited by: Mary Milorrie M. Campos