Loads of businesses undergo bankruptcy and liquidation because of their improper accounting practices. An accountant performs an necessary role in a company since cash administration is one among their key roles in addition to keeping proper accounting records for every activity. The reasons why a enterprise wants an accountant are a lot and the following are a few of them:
Accountants make sure that monetary statements comply with the Worldwide Accepted Standards (IAS). Preparation and presentation of economic 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 which are presented in the financial statements give the accurate financial position of the business.
Controlling of funds utilization is one other task of the accountants in a business. Development of a system for inside control is the responsibility of the accountant. The system will forestall and management the embezzlement or misuse of money in a business. It provides the guidelines on how transactions are to be dealt with thereby locking out any avenue that is perhaps used for funds misappropriation. Inner controls basically assist businesses to achieve certain goals, aims and tasks. Cash control systems are essential controls that businesses must develop. The accountant plays an essential role in attainment of this undertaking.
The other important reason why a enterprise needs an accountant is for taxation purposes. Tax planning permits the enterprise to develop a plan for anticipated income within the years that follow. The plans could assist in the administration 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 revenue generating activities. Timely filing of tax returns additionally assists the enterprise in avoidance of penalties on late payment which saves some money for the business. The enterprise can even be able to keep away from overpayment of tax which implies that they will not have money that is tied in tax refunds.
Budgeting alongside with forecasting of business revenues is capable of being prepared properly by accountants. This is attributed to the preciseity that the accountants have huge knowledge of operational prices 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 development predictions in addition to planning for whichever anticipated disruptions that may happen in money flows. This follow is normally based on the idea of going concern which is a part of the Generally Accepted Accounting Ideas that every accountant is required to follow in the accounting profession.
The discussion above shows that an accountant is important in any enterprise since they make positive that cash stream is monitored closely. It is believed that the individual who has control over the money normally controls the whole business. It makes sense since profit maximization is the main goal of most companies and this is likely to be tough to achieve without an accountant to control the funds. Consequently, successful companies are those who have an accountant.
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