Why should I hire an accountant for my business?

Many companies go through bankruptcy and liquidation due to their improper accounting practices. An accountant plays an important role in an organization, as money management is one of their key functions, as well as keeping proper accounting records for each and every activity. The reasons why a company needs an accountant are many and the following are some of them:

Accountants ensure that financial statements comply with Accepted International Standards (IAS). The preparation and presentation of the financial statements follows a series of accounting standards accepted throughout the world. An accountant ensures that these standards are met while preparing and presenting financial statements. This ensures that the figures presented in the financial statements give the accurate financial position of the business.

The control of the use of funds is another task of the accountants in a company. The development of an internal control system is the responsibility of the accountant. The system will prevent and control the embarrassment or misuse of money in a business. It provides guidelines on how transactions should be handled, thereby blocking any avenues that could be used for embezzlement. Internal controls basically help companies achieve certain goals, objectives, and tasks. Cash control systems are crucial controls that companies need to develop. The accountant plays an important role in the achievement of this company.

The other important reason why a business needs an accountant is for tax purposes. Tax planning allows the company to develop a plan for anticipated income in subsequent years. The plans can help manage money in a way that maximizes the tax benefits of businesses. The benefits of this include spending less time on tax processes and using free time to focus on other income-generating activities. Filing tax returns on time also helps the business avoid late payment penalties, which saves some money for the business. The business will also be able to avoid overpaying taxes, meaning no money tied to tax refunds.

Accountants can properly prepare the budget along with the forecast of the business income. This is attributed to the news that accountants have a vast understanding of operating costs as well as the flow of business income. The above forecasting and budgeting processes allow companies to formulate revenue projections for the near future. These formulations can help the business institute its growth predictions as well as plan for any anticipated disruptions in cash flows that may occur. This practice is generally based on the going concern concept, which is part of the Generally Accepted Accounting Principles that each and every accountant in the accounting profession must follow.

The above discussion shows that an accountant is important in any business as he/she makes sure that the cash flow is closely monitored. It is believed that the individual who has control over the money normally controls the entire business. It makes sense as profit maximization is the main objective of most companies and this can be difficult to achieve without an accountant keeping track of the funds. Consequently, successful companies are those that have an accountant.