Running a small business involves taking decisions on a number of business aspects related to products, services, marketing, advertisement, administration, finances, etc. While all other aspects can be taken care of by the businessman on his own, finance and accounting needs special attention, that’s where an Accountant comes into the picture.
Accounting interprets the financial and operational data and gives an accurate insight into the financial health of the company. It helps businesses to have total control over the company’s finances and enables companies to make better and informed business decisions.
Accounting provides a company with numerous benefits like:
- Maintaining accounts and records of the company
- Preparing financial statements, cash flow, etc
- Filing taxes
- Provides necessary information to related/ third parties
- Helps in comparing income and expenses
- Helps in decision making, etc
The need for an Accountant…
While small businessmen think they can take care of the company finances by themselves, hiring an accountant can help them manage their finances in a better manner and also saves a lot of time. As companies grow they need a specialist who can do a lot more than just save time.
No doubt it is rightly said;
“Behind every good business is a good accountant”.
A good business owner needs to make decisions that are mostly based on various financial parameters and so it is important to have a good accountant with whom the business owner can discuss his decisions.
10 ways in which an accountant can help small businesses are:
1. Manage financial data:
Small businesses need to focus on doing their business right and this calls for maintaining their financial data. An accountant uses his expertise in managing a company’s financials by:
a. Preparing financial statements:
An accountant is responsible to prepare the company’s Profit & Loss account and Balance sheet, by doing so he throws light on the financial health of the company. He can easily advise the business owner about the performance of the company, the assets they own, the liabilities payable, the areas that need more attention, etc.
b. Preparing Cash Flows:
By preparing cash flow, the accountant can easily provide details about how much money
is available for regular operations, how much money is required for future needs, whether money is coming in regularly as expected or not, and what measures need to be taken to ensure that the flow of cash is regulated for the company to survive, grow and flourish.
2. Streamline the Accounting system:
A good accountant knows that if accounting systems are not in place then accounting can go out of control and important and vital data can be lost. Thus, he will always advocate for the best accounting system that can help the company to carry out all the necessary business tasks in one place. Accounting software is the most important tool that provides all the financial information in an organized manner and readily accessible to provide a clear idea of what is happening at all times in the company.
3. Analyze financial data:
An accountant analyses financial statements and cash flows which helps him to determine where the business finances are being utilized. Such information can help owners to make improvements in products, processes, make budgets, etc. which helps companies to scale up their business performance.
4. Assisting in the loan process:
Small businesses often need loans while carrying on their business activities. Since the accountant is fully aware of the financial position of the firm, he can always provide the best advice related to the purpose for obtaining loans and also provide various options to source the required funds. As accountants help owners by providing information and data required for obtaining loans they also help them by filling out the loan applications that provide a better chance to obtain loans.
5. Register for GST and other taxes:
If the business crosses a particular turnover threshold then it has to be registered for GST. This means that all sales/purchases would have to be done with GST compliances in order to avail benefits of tax credits. An accountant can deal with the entire application process and also streamline the application of GST and/or any other taxes, thus saving time and money required to be spent in the admin work.
6. Filing Taxes:
A good accountant is always up to date with tax laws and requirements. The accountant is primarily responsible to strategize the company’s taxes, file and submit tax returns on time to avoid penalties. Filing taxes is a complicated process and since the accountant is well versed with all business information, he makes this task rather easy and also helps companies to be tax compliant.
7. Guide for business growth:
An accountant can provide advice on business records, audits, systems, business decisions, and many more things. When it comes to making big things happen, the accountant is the only one who can provide you with the correct data and numbers. Thus, you can rely on the accountant at every stage of your business.
8. Review various documents and contracts:
An accountant can carefully analyze agreements and contracts for taxation or accounting implications and provide advice about the consequences of the same on the company’s financial health. Such expert advice from the accountants helps business owners to avoid agreements/contracts with any negative impact on the company’s financial health.
9. Help in Audits:
For businesses needing statutory audits, the accountant is the go-to person for all the financial information. Even for small businesses that take up internal audits to ensure that business is performing as expected, all operations are in place and all goals are being met, an accountant always plays a vital role in providing all the necessary data and information.
10. Mergers and Acquisitions:
Small businesses that are eager to grow often resort to buying or selling businesses, this provides them with a better chance to enter new markets. If the company is planning to buy another company then the accountant can go through the financials of the target company and provide correct assistance regarding the practicalities of the purchase and ensure everything is satisfactory and up to the mark.
An accountant can help small businesses in a number of ways and makes businesses easy. Finding the right accountant is a task. With Diligen at your service, all your accounting needs are taken care of under one roof. Our qualified teams of accountants support your business and help you stay at the top of your finances. We use the best accounting software to simplify your accounting, bookkeeping, invoicing, and payroll. Diligen provides accounting services for all your business finances or even for any selected area for which you may need assistance and support. Our team of professionals is experienced in various business sectors and is always proactive in their advice which helps you grow your business.
So if you need an accountant do get in touch with Diligen’s expert and friendly team today.