These are the 5 common functions that an accountant can perform for a business.
An accountant is not someone who only prepares the tax returns for your business. Neither is he someone who only does that count and record keeping. In fact, an accountant is a person who has extensive financial knowledge. If he is someone who has experience with doing accounting for businesses, then he can give me some valuable insights and guidance regarding all matters pertaining to finance about your business. While he may not be the person to recommend design and the relevant enhancements in your product, he could be the person who tells you how to cut down your overhead costs and manage your year-end tax liability. A business accountant is also the person who gives you a clear picture of how much money the business is making. When clever accounting, you will be able to see exactly what the profit-making areas of your business and which are costing more than necessary.
These are five common functions that an accountant performs for business.
Business Advisory Services
An accountant is someone who has extensive knowledge of finance matters. If he has been involved in your business right from the beginning, he will also be knowledgeable about your business environment, your business lands as well as a personal financial status. Accountants can offer advice on everything from insurance to business expansion. They can help you acquire extra assets, tell you when the time is right to expand business, invest or to make changes in certain costs and expenditure of the business to enhance your profit-making. An accountant can give you advice on which areas of your business is profit-making and where unnecessary expense is going. An accountant and a good accounting system is required to get a clear picture of how much money you are making and how the expenditure and cost of running the business is being managed.
Accounting and Record Keeping
Accounting and record keeping is one of the most basic functions that an accountant performs. However, many small business owners prefer to keep their own books and records instead of having an accountant do it. The reason for this is easy to understand. A person is responsible for the accuracy of their financial records and is held accountable for them when examined by the lenders or the Internal Revenue Service. Therefore it makes more sense for the business owner to maintain them and keep them accurate. However, the great utility of the accountant is in setting up of the effective accounting system which allows the business owner to easily maintain his financial books and records. An effective accounting system will allow the business owner to evaluate the profitability of the business at any given point of time. He will be able to track expenses and see which areas allow him to cut down costs and increases profitability. The business owner can control the cost of this product and profit margin as well as keep things within a business budget using the accounting system set up by his business account. The business owner will be able to keep track of the sales and expenses and take advantage of any seasonal trends that happened to show up in the accounting statement. Accurate and effective maintenance of financial books: business also results in a greater ease when it comes to filing tax returns.
Apart from all the other functions that an accountant serves, tax planning and compliance with all the taxation rules and regulations is an important part. A business should always be in compliance with the federal, state and county laws of taxation. Planning for tax liability also determines the kind of legal business structure that you create.
Almost all businesses required auditing by the third-party accountant in order to file tax returns. Most of the lending institutions and banks require the proper auditing of the business before they can approve the business was alone. Auditing of business includes preparing financial statements as well as an assurance by the content or third-party that the companies financial information is accurate.
Many accountants are moving into this area for businesses as well as it is the most natural extension of their financial knowledge and expertise. An accountant can help you finance your business, plan for future expenditure, requirement of future financial capital input, cost of growth, cost of hiring employees, controlling overhead costs etc. when an accountant is involved with the business right from the inception, he is in a great position to be intimate with the working of the business as well as the long-term goals. This puts them in a great position to be of incredible advisory assistance when it comes to making any decision that involve money and finance.