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 its key functions along with keeping proper accounting records for any and all activities. The reasons why a company needs an accountant are many and the following are some of them:

Accountants ensure that the 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 the financial statements. This ensures that the figures presented in the financial statements provide the accurate financial position of the business.

Control of the use of funds is another task of accountants in a company. The development of an internal control system is the responsibility of the accountant. The system will prevent and control embarrassment or misuse of money in a business. It provides the guidelines on how transactions should be handled, thus blocking any avenues that could be used for embezzlement. Internal controls basically help companies to 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 undertaking.

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 the following years. The plans can help in managing money in a way that maximizes tax benefits for businesses. The benefits of this include spending less time on tax processes and using free time to focus on other income generating activities. Timely filing of tax returns also helps the business avoid late payment penalties, saving you some money. The business will also be able to avoid overpayment of taxes, which means it won’t have money tied up in tax refunds.

Accountants can properly prepare the budget along with forecasting the business revenue. This is attributed to the news that accountants have vast knowledge of operating costs as well as business revenue streams. The above forecasting and budgeting processes allow companies to formulate revenue projections in the near future. These formulations can help the business institute its growth predictions as well as plan for any anticipated disruptions that may occur in cash flows. 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 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 since profit maximization is the main objective of most companies and this can be difficult to achieve without an accountant monitoring the funds. Consequently, successful companies are those that have an accountant.