A lot of businesses go through bankruptcy and liquidation due to their improper accounting practices. An accountant plays an important role in an organization since money management is one of their key roles in addition to keeping proper accounting records for each and every activity.
Preparation and presentation of financial 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 financial statements is being done. This ensures that the figures that are presented in the financial statements give the accurate financial position of the business.
A business needs an accountant for taxation purposes. Tax planning permits the business to develop a plan for anticipated revenue in the years that follow.
The plans may assist in the management of money in a way that maximizes the businesses tax benefits.
- The benefits of this include spending less time in taxation processes and using the spare time in concentrating on other income generating activities.
- Timely filing of tax returns also assists the business in avoidance of penalties on late payment which saves some money for the business.
- The business will also be able to avoid overpayment of tax which means that they will not have money that is tied in tax refunds.
Budgeting along with forecasting of business revenues is capable of being prepared properly by accountants. This is attributed to the actuality 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 businesses to formulate projections of revenues into the near future. These formulations can lend a hand to the business to institute its growth predictions in addition to planning for whichever anticipated disruptions that may occur in cash flows.
The above has shown that an accountant is important in any business since they make sure that cash flow 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 major goal of most businesses and this might be difficult to achieve without an accountant to control the funds. Consequently, successful businesses are those that have an accountant.
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