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Financial & business-planning

The Role of Accountants in Business Development

by Cogneesol Inc., from Cogneesol Inc., on Jul 20
Many businesses believe that accountants are tax agents and auditors. Usually, they are the one who protects the integrity of finances and maintains a stability within the business processes
Business solution

There are so many reasons for hiring an accountant at different phases of your business, from managing your books to tax audits. So, if you know the importance of an accountant in an organization that means your business is on the right path

A survey was held among small businesses recently by Wasp Barcode Technologies, which reports that many small business owners graded accountants as the most important expert for their growing business. And when they were asked how much familiar they are with accounting functions the percentage was in the middle range. The most business owners said, “I would never able to file my business taxes without the help of an expert accountant”.

So usually businesses hire accountant during tax season just to streamline their financial statement and file tax accurately. However, apart from this, accountants can also help you plan your financial budget, implement tax saving strategies and also guide you with various investment opportunities, etc.

Therefore, why don’t you prefer accountant’s right from the business plan to business formation to make your life easier at each step?

Here I have compiled a list of roles an accountant can perform in business development:

1. You’ll need help when you choose a business structure

There are commonly five types of business structure including Partnership, C Corporation, Sole proprietorship, S corporation and Limited Liability Company (LLC). If you are embarking on a new business venture make sure that you choose a good business structure so that in a case when your business takes a turn for the worse- the debts become unmanageable or it hits with a punishing legal judgment and the outcome from could be terrible for your business. 

Therefore, having an accountant at the initial stage can help you choose the best legal structure in all aspects. They can make understand the impact of regulatory norms with every business structure and taxes applicable with the same.

2. You’ll need help to gather all your financials at one place

When you have a small business, having an appropriate structure of your financials is essential to stay lawful in the business world. Accountants can maintain and collect all the financial data of your business accurately. From managing bills, recording expenses, reconciling statement to preparing financial reports. 

Moreover, along with maintaining your books, meeting the compliance and policies at the corporate level, is where an accountant plays a significant role. They will also help you squirrel your money so that during any emergencies you may not run out of cash.

3. You’ll need advice and reports to forecast budget

Financial reports are important to analyze the financial position of the business in the market. Being a small business owner, for you, it is difficult to compile the financial data and prepare reports on a monthly or annual basis. As you are unaware of the principle of accounting and regulatory norms that are posed by the government. 

However, if you have an accountant, you don’t have to worry about preparing financial reports. As they will accurately gather all the financial data from different books, reconcile every statement and prepare reports according to the government norms. 

Moreover, they also act as an analyst. They do certain analysis using financial data and help you implement strategies. In a nutshell, they play the role of a financial advisor giving you projection of your financials and helping you with various investment opportunities in the market.

4. You’ll need help to meet the taxman and government auditors

Meeting tax deadlines is essential for every small business owner in order to avoid late fee charges or penalties. And this is impossible for you, if you are handling business accounts on your own as there are many more tasks you need to manage. 

Therefore, hiring an accountant can be a viable decision as meeting tax deadlines is the part of their job. So it is better if you provide your accountant the following information required to meet the taxman:

  • Identification Information
  • Copy of Most Recent Tax Return
  • Wage Statements
  • Proof of Expenses
  • Reserves
  • Record of transaction from your business accounts

More importantly, with help of an accountant you can easily go through your audits with all the relevant financial documents that are real and accurate. Accountant can ensure that you don’t disrupt any tax laws afterwards- because the government will definitely be watching.

5. You’ll need assistance for decision-making process

Accurate financial reports gives a clear picture of business finances enabling small businesses to make an informed business decision. For example, with accurate books a small manufacturing business can decide which product is in more demand to stay profitable in the market. They can also perform cost analysis for certain products and division, which include variable and fixed costs. 

Moreover, with financial reports, you can also analyze following aspects:

  • Where your business stands in the market?
  • Which are your expenses?
  • How you can reduce your expenses?
  • How you can improve the profitability of your business?
  • You can project your budget for the next year
  • You can set targets and goals for your team

Accountants can help you every footstep of the way

So you might have understood that an accountant can help you at every footstep of your business. Your passion is running your business with enthusiasm. According to researchers, 58% small businesses dislike managing their finances and federal taxes. So, handover your financial job to an accountant and focus on what you love doing.

And a recent survey released by researchers, around 78% of businesses all over the world finds hiring an in-house accountant at the initial stage of the business costs more, so they prefer delegating their accounting tasks to an accounting outsourcing company. As these firms can work on different platforms as per the requirement enabling businesses to focus on core activities.

Note: Full or partial copy of the publication is allowed only with the direct active link to InnMind platform.

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