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Do I need an accountant for my business?

  • Posted 11th March 2015

Do I need an accountant for my business?

If you are planning to start your own business, your accountant will act like your business advisor. They will assist you in formulating and implementing your business plan and take care of all the tax issues that incur while registering a new business. infographics benefits of hiring an accountant Hiring an accountant is not only about hiring somebody to manage your money. It is about finding someone to manage your business. An expert accountant can not only present you the up-to-date information on any legal or general inquiries, but also assist you in book-keeping. Even if you plan to take care of book-keeping yourself, they can still be helpful with setting up a state-of-the-art book keeping systems. They can also be obliging when it comes to budgeting, decision making, forecasting cash flows, credit control or general tax, vat or financial advice. One of the perks of hiring accountants, whether you are a start-up or an established business, is that they can find the best way for you to arrange extra finance without putting your business at threat. In this article, we have present few reasons to hire an accountant.

Do I need an accountant? - Explained

Checks the accuracy of financial accounts One of the most common reasons for hiring an accountant is to check the accuracy of your financial records. With the help of various accounting tools, an experienced and skilled accountant can check how accurate your financial records are for a given accounting period. Helps in making decisions When you hire an accountant for your business, they will provide relevant cost data and other related information which will assist you in taking managerial decisions such as make or buy, whether or not to introduce a new product line, replacement of old machines with a new state-of-the-art automatic plants and so on. Help in controlling cost With a set of accounting tools and techniques such as standard costing and budgetary control, your accountants can help you in adjusting cost effectively. Help in cost reduction As discussed earlier, an expert accountant can not only control the cost but also reduce it. With their skill set, they can help you to introduce cost reduction program and find new techniques to reduce cost of your product. Help in controlling inventory Perpetual inventory system, which is an integral part of cost accounting, helps you to prepare interim profit and loss account. Other inventory control techniques like level setting, ABC analysis etc. are also used by accountant to optimize your inventory level. Assists you in setting the selling price of a product We all have to agree that cost is one of the most decisive factors in fixing price of a product. A system of cost accounting, well-versed by your accountant, guides the management of your firm in fixing the selling price of your product, especially during depression when the prices may have to be set below the fixed cost. Reveals profitable and unprofitable activities Your accountant will help you sort out profitable and unprofitable activities so that you can take steps to reduce or eradicate inefficiencies and wastages occurring in your business such as spoilage of machinery, under-utilization of potential or capacity, idle time, etc. Assists in formulating business policies With an array of information that your accountants are skilled to present, you can easily interpret them to formulate pricing and production policies and prepare estimates of contracts and tenders. Reveals idle capacity Your business firm may not operate in full capacity because of bottlenecks such as machine breakdown, labour absenteeism, etc. Your accountants can work out the cost of these idle capacities so that you can take immediate actions to make improvements.

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