Plenty of companies go through bankruptcy and liquidation due to their improper accounting practices. An accountant performs an essential function in a company since money management is one among their key roles in addition to keeping proper accounting records for each activity. The reasons why a enterprise wants an accountant are lots and the following are some of them:
Accountants make sure that financial statements comply with the Worldwide Accepted Standards (IAS). Preparation and presentation of financial statements follows a number of accounting standards which are accepted worldwide. An accountant makes certain that these standards are adhered to while preparation and presentation of the monetary statements is being done. This ensures that the figures which can be introduced in the financial statements give the accurate financial position of the business.
Controlling of funds utilization is another task of the accountants in a business. Development of a system for internal control is the responsibility 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 is perhaps used for funds misappropriation. Internal controls basically help businesses to achieve certain goals, targets and tasks. Cash management systems are crucial controls that companies need to develop. The accountant plays an vital role in attainment of this undertaking.
The other necessary reason why a business wants an accountant is for taxation purposes. Tax planning permits the enterprise to develop a plan for anticipated revenue within the years that follow. The plans could assist in the administration of money in a way that maximizes the businesses tax benefits. The benefits of this embody spending less time in taxation processes and utilizing the spare time in concentrating on other earnings generating activities. Timely filing of tax returns also assists the business in avoidance of penalties on late cost which saves some cash for the business. The business will even be able to keep away from overpayment of tax which signifies that they won’t have money 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 actuality that the accountants have huge information of operational costs as well as the movement of business revenues. The above processes of forecasting plus budgeting permit the companies to formulate projections of revenues into the close to future. These formulations can assist to the business to institute its growth predictions in addition to planning for whichever anticipated disruptions that may occur in cash flows. This follow is usually based on the idea of going concern which is part of the Usually Accepted Accounting Principles that every accountant is required to follow within the accounting profession.
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