Accounting For Tax Deductible Expense On Cash Flow Statement Why Should I Hire an Accountant For My Business?

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Why Should I Hire an Accountant For My Business?

Many businesses go through bankruptcy and liquidation due to their improper accounting practices. Accountant plays an important role in an organization as their major role is money management along with keeping proper accounting records for every activity. There are many reasons why a business needs an accountant and some of them are as follows:

Accountants ensure that financial statements comply with Internationally Accepted Standards (IAS). The preparation and presentation of financial statements follows several accounting standards accepted worldwide. An accountant ensures that these standards are followed while preparing and presenting financial statements. It ensures that the figures presented in the financial statements give an accurate financial position of the business.

Controlling the use of funds is another function of business accountants. It is the accountant’s responsibility to develop a system for internal control. This system will prevent and control embezzlement or misappropriation of business funds. It lays down guidelines on how transactions should be handled so as to stop any avenue for misuse of funds. Internal controls basically help businesses achieve specific goals, objectives and tasks. Cash control systems are important controls that businesses need to develop. Accountant plays an important role in completing this activity.

Another important reason why a business needs an accountant is for taxation. Tax planning allows a business to develop a plan for expected earnings in future years. Plans can help manage money in a way that maximizes business tax benefits. The benefits of this include less time spent on the taxation process and free time to focus on other income generating activities. Filing tax returns on time also helps the business avoid late payment penalties which saves the business some money. Businesses will also be able to avoid overpaying tax which means they won’t have money attached to their tax returns.

A budget with an estimate of business revenue is able to be properly prepared by accountants. This is attributed to the fact that accountants have extensive knowledge of operational costs as well as revenue streams of a business. The above processes of forecasting and budgeting allow businesses to make forecasts of earnings in the near future. These formulations can help a business predict its growth in addition to planning for expected disruptions in cash flow. This practice is generally founded on the concept of going concern which is part of the generally accepted accounting principles that every accountant must follow in the accounting profession.

The above discussion shows that an accountant is important in any business as they ensure that the cash flow is closely monitored. It is believed that the person who controls the money generally controls the entire business. This makes sense as profit maximization is the main objective of most businesses and this can be difficult to achieve without an accountant to control the funds. As a result, successful businesses are those that have an accountant.

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