Every company needs to focus on four key areas to achieve sustained and profitable growth: finances, sales and marketing, production or operations, and human resources.
Why do you really need an accountant in your company? What good are accounting and the information it offers? How much should you invest in your accounting? What requirements and what functions does an accountant perform in your company? At what point should you think about having a professional accountant in your business?
It is usual for small and medium businesses to see accounting as a “necessary evil” and hire external expertise such as professional accountants central London offers, to take care of the basics; that is, “financial accounting” and preparation and filing of monthly and annual tax returns.
When businesses start to grow they face the need to have certified or audited Financial Statements to later manage bank loans and this will lead them to look for more qualified professionals to meet these new requirements. Banks do not finance businesses or companies that do not have reliable financial information.
The foregoing is important for all businesses and are reasons for hiring the services of qualified accountants. That is, every company, small or medium, should:
- Keep accounting in accordance with the tax and commercial regulations required by the law.
- Present the declarations of the different taxes in a timely manner, which must be duly supported by documentary evidence.
- Prepare periodic financial statements that banks will request to grant financing for working capital or investment.
But accounting must be seen by the employer to fill an even greater need. It is about the need to have timely, reliable and useful financial information to support decision making and to control results.
Each month business owners should receive financial statements from their accountants, whether external or staff members, to know the true financial situation of the company, economic results, and how the cash flows and capital are being managed in the business.
What should a business owner expect from their accountant?
You can expect a small business to hire the services of external accountants. When the volume of documents and transactions is small, it will be enough for a professional to go through the documentation of the business and process it in his own office.
When the business grows, especially businesses with a large volume of transactions such as restaurants and retail stores, among others, external accountants should go through the accounts every week.
There might also come a time when the business owner asks that the accounting is kept internally within the company itself, although the accountants remain external.
A business owner should expect from his accountants:
- Knowledge of tax matters and experience to apply the rules that regulate the business activity.
- Technical expertise and experience to process, in an accounting system, the documentation in such a way that up-to-date and organised accounting can be maintained.
- Professional capacity to prepare and explain the three basic Financial Statements each month, and thus support the entrepreneur with useful and reliable information to make sound decisions.
The quality of the decisions business owners make depends very much on the quality of the financial information they use.
Do not underestimate the need for financial information from your own company. It’s your company, it’s your investment, you must know all the details about the finances of your business.
Although finances are not the only key to success, good accounting is essential to take the company on a path of sustained and profitable growth.