Here are the 9 reasons why you need to hire an accountant for your business:
- Accountant helps to set goals
- keeps accounting books and records
- Helps to handle tax matters
- Oversee the jobs done by others
- Helps to manage your pay roll
- Set up internal control systems
- Helps to track your stocks/inventories
- Can help to improve efficiency in financial matters
- Prepare periodic and annual financial statements
Have you ever stopped to think of what it would look like if fire or any natural disaster were to strike and destroy part of your business? And you have no records to show what your business is worth?
Far too many small business owners are reluctant to hire accountant for their small businesses.
They give all sorts of excuses, including:
- their businesses are small, so it is not necessary
- there will be no money to pay
- accountant will reveal their financial secrets
- They do not want anybody to ask them questions on how they spend their money.
- they want financial freedom
- and so on.
Accountant helps to set goals
In your Small Business an accountant can help you to set Goals.
Beyond setting goals, he can help by taking the necessary steps to achieve set goals.
In other words, an accountant can help you to make strategic plans for the future growth of your small business.
Keeps accounting books and records
Your accountant will help you to ensure that all mandatory books of account required by law are maintained.
For example, he will:
- write up all the mandatory accounting books and records
- ensure that all the entries in the books are accurate,
- simple and easy to understand
- prepare monthly bank reconciliation statements
Most importantly, the accountant should will ensure that any information required by any government agency, e.g. tax authorities are readily available.
Accountant will Handle Tax matters
From time to time, the relevant tax authorities may ask for any information concerning your operations.
This is particularly true at the end of each year when they come asking for tax on your profits.
Consequently, your accountant can help you to:
- do your tax computations to ascertain your tax liabilities
- file your business’ annual returns
- he will be required to sort out any queries raised by the tax authorities
- ensure that agreed tax liabilities are paid promptly to avoid sanctions
Most importantly, it is his responsibility to ensure that there is a good working relationship with the relevant tax authorities.
Will help to oversee the jobs done by others
Your accountant, by virtue of his training and position, can help to oversee the jobs done by the following employees:
- Store keepers
- Sales clerks
- Ledger clerks
- Cash register operators
- Accounts clerks
Furthermore, by extension, your accountant can perform the dual functions of accountant and internal auditor.
This is particularly necessary if your business is a small one operating on a small budget.
Helps to manage your Pay Roll
Salaries and wages are a major component of your business overhead costs.
Unfortunately, this is one of the business expenses you cannot run away from.
Consequently, the pay roll need to be properly managed. And it is the duty of the accountant to do so.
To this end, he will ensure that:
- all employees in your business are registered
- new employees are enrolled
- all employees are properly placed on their respective salary/wages structure
- employees pay roll are prepaid correctly
- brought to you for approval
- before payment to the employees
Equally important is that he can ensure that all mandatory deductions are made before salaries are paid to employees.
Most importantly, it is the responsibility of the accountant to make sure that Pay As You Earn [PAYE] are remitted to the relevant tax authorities within the specified period. Failure to do so usually attract sanctions. In Nigeria, he must pay over the money to the tax authorities within 7 working days.
Accountant can set up internal control system
Your accountant can help you to design an effective and efficient internal control systems for virtually all areas of your business:
For example, he will ensure that:
- all existing and potential loop holes that could lead to financial leakages are blocked
- frauds, errors and omission are reduced to the barest minimum
Thus, effective and efficient internal control systems will help your business to run smoothly and grow.
Can help in tracking your stocks/inventories.
As an oversight function, your accountant can help to track your stocks and inventories.
For example, he can help you to:
- design stocks records
- stocks are kept safe and secure
- Maintain assets register
Once a while, the accountant can to carry out physical inspection of your assets to make sure that they are available in their respective locations.
Accountant can help to improve efficiency
An accountant can help you to improve on your business efficiency, especially where money is concerned.
For example, he can make best practices recommendations to you.
Furthermore, he can suggest ways to reduce costs and enhance revenue
Most importantly, he can offer useful advice or suggestions in the following circumstances:
- when you want to diversify into other businesses
- invest in securities
- when you need to do cost and benefit analysis
- interpret financial statements
- calculate important ratios for decision making.
Prepare financial statements
It is the responsibility of your accountant to prepare periodic or annual financial statements for your small business.
When it is time to invite external auditors at the end of financial year, annual financial statements prepared by your accountant will make their work easier, quicker.
Besides, external auditors will charge you less audit fees compared to when they have to prepare annual financial statements from incomplete records.
Usually, annual financial statements for small business will comprise of:
- Trading account
- Profit and Loss Account
- Balance Sheets
As I have mentioned in one of my previous articles, if you are running a business without keeping accurate accounting records, you will not know the direction your business is going.
In other words, you are like a pilot trying to fly an airplane without an effective and efficient compass.
Relationship with your Accountant
You should see your accountant as a development and growth partner.
However, the quality of services you get from your accountant should depend on the level of mutual:
- working relationship
that exist between you and your accountant.
Your take away
Do not spend your business capital recklessly because the accountant cannot question you.
If you do not give him free hand to do his job in a professional and ethical manner, you will be hurting your business without knowing it.
This is because if your business goes under, the accountant will simply take his calculator, pen and eraser and move away, leaving you to count your losses.
Therefore, in your own interest and in the interest of your business, you should make yourself accountable for the:
- and the growth of the business.
Furthermore, do not forget that you may be good in marketing but not too good with figures.
More importantly, remember that by virtue of his training, an accountant is someone trained not only in accounting, but also in marketing, economics, business and financial management and lots more.
Someone once said “if you cannot run walk. If you cannot walk crawl. If you cannot crawl, by all means move”.
So if you cannot hire an accountant, contract your accounting job to a jobber.