A lot of businesses undergo bankruptcy and liquidation because of their improper accounting practices. An accountant plays an essential role in a company since money management is one of their key roles in addition to keeping proper accounting records for every activity. The reasons why a business needs an accountant are a lot and the following are some of them:
Accountants make certain that financial statements comply with the International Accepted Standards (IAS). Preparation and presentation of financial 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 that are offered within the financial statements give the accurate financial position of the business.
Controlling of funds usage is one other task of the accountants in a business. Development of a system for internal control is the responsibility of the accountant. The system will prevent and control the embezzlement or misuse of cash 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. Internal controls basically assist businesses to achieve sure goals, objectives and tasks. Cash management systems are essential controls that companies have to develop. The accountant plays an important position in attainment of this undertaking.
The other essential reason why a enterprise needs 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 might assist within the management of money in a way that maximizes the companies tax benefits. The benefits of this include spending less time in taxation processes and utilizing the spare time in concentrating on other earnings producing activities. Well timed filing of tax returns also assists the business in avoidance of penalties on late payment which saves some money for the business. The enterprise will even be able to keep away from overpayment of tax which implies that they will not have cash that's tied in tax refunds.
Budgeting along with forecasting of business 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 flow 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 progress predictions in addition to planning for whichever anticipated disruptions which will occur in cash flows. This observe is often founded on the idea of going concern which is part of the Typically Accepted Accounting Principles that each accountant is required to comply with in the accounting profession.