A lot of businesses go through bankruptcy and liquidation resulting from their improper accounting practices. An accountant performs an necessary role in a corporation since money management is one of their key roles in addition to keeping proper accounting records for each and every activity. The reasons why a business wants an accountant are loads and the following are some of them:
Accountants guantee that monetary statements comply with the International Accepted Standards (IAS). Preparation and presentation of monetary statements follows a number of accounting standards which are accepted worldwide. An accountant makes sure that these standards are adhered to while preparation and presentation of the monetary statements is being done. This ensures that the figures that are presented in the monetary 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 accountability of the accountant. The system will stop and management the embezzlement or misuse of money in a business. It gives the guidelines on how transactions are to be handled thereby locking out any avenue that may be used for funds misappropriation. Inside controls basically help businesses to achieve certain goals, targets and tasks. Money management systems are crucial controls that businesses must develop. The accountant plays an necessary position in attainment of this undertaking.
The other necessary reason why a enterprise needs an accountant is for taxation purposes. Tax planning permits the business to develop a plan for anticipated revenue within the years that follow. The plans might assist within the management of cash in a way that maximizes the businesses tax benefits. The benefits of this embody spending less time in taxation processes and using the spare time in concentrating on other revenue generating activities. Timely filing of tax returns also assists the business in avoidance of penalties on late fee which saves some cash for the business. The business will even be able to keep away from overpayment of tax which means that they will not have cash that is tied in tax refunds.
Budgeting together with forecasting of business revenues is capable of being prepared properly by accountants. This is attributed to the reality that the accountants have huge data of operational prices as well because the stream of business revenues. The above processes of forecasting plus budgeting allow the businesses to formulate projections of revenues into the near future. These formulations can assist to the business to institute its development predictions in addition to planning for whichever anticipated disruptions which will happen in money flows. This observe is often based on the idea of going concern which is part of the Typically Accepted Accounting Principles that each and every accountant is required to comply with within the accounting profession.
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