Lots of companies undergo bankruptcy and liquidation attributable to their improper accounting practices. An accountant plays an important function in a corporation since cash management is certainly one of their key roles in addition to keeping proper accounting records for every activity. The reasons why a business wants an accountant are a lot and the next are a few of them:
Accountants make certain that financial statements comply with the International Accepted Standards (IAS). Preparation and presentation of economic statements follows a number of accounting standards which are accepted worldwide. An accountant makes positive that these standards are adhered to while preparation and presentation of the financial statements is being done. This ensures that the figures which are offered within the financial statements give the accurate financial position of the business.
Controlling of funds usage is another task of the accountants in a business. Development of a system for inner control is the responsibility of the accountant. The system will forestall and control the embezzlement or misuse of cash in a business. It offers the guidelines on how transactions are to be handled thereby locking out any avenue that might be used for funds misappropriation. Internal controls basically assist companies to achieve sure goals, targets and tasks. Cash management systems are essential controls that companies must develop. The accountant performs an essential position in attainment of this undertaking.
The opposite necessary reason why a enterprise needs an accountant is for taxation purposes. Tax planning permits the business to develop a plan for anticipated income within the years that follow. The plans may help in the management of cash in a way that maximizes the businesses tax benefits. The benefits of this include spending less time in taxation processes and utilizing the spare time in concentrating on different earnings generating activities. Timely filing of tax returns also assists the enterprise in avoidance of penalties on late payment which saves some cash for the business. The business will even be able to avoid overpayment of tax which implies that they won’t have cash that is tied in tax refunds.
Budgeting along with forecasting of enterprise revenues is capable of being prepared properly by accountants. This is attributed to the preciseity that the accountants have vast knowledge of operational costs as well as the move of enterprise revenues. The above processes of forecasting plus budgeting permit the businesses to formulate projections of revenues into the close to future. These formulations can assist to the enterprise to institute its growth predictions in addition to planning for whichever anticipated disruptions that will happen in cash flows. This follow is normally founded on the concept of going concern which is a part of the Usually Accepted Accounting Principles that each accountant is required to observe within the accounting profession.
The dialogue above shows that an accountant is essential in any business since they make certain that cash circulate is monitored closely. It’s believed that the individual who has control over the money normally controls the whole business. It makes sense since profit maximization is the most important goal of most businesses and this could be troublesome to achieve without an accountant to regulate the funds. Consequently, successful businesses are those who have an accountant.
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