There are many reasons why you need to hire an accountant for your business.
An Accountant is someone whose job it is to keep and check financial accounts.
Do you know the current worth of your business?
Do you even know whether your business is making profits or not?
Are you a small business owner who thinks that your business is too small to hire an accountant?
This article, therefore, seeks to bring out the reasons why you need to hire an accountant for your business.
Accountant helps to set goals
Apart from the normal accounting jobs of keeping financial accounts books and records, your accountant can help you to set goals for your business.
Beyond that, in a small business like yours, he can even go further to ensure that set goals are achieved.
Hire an accountant: keep accounting books and records
It is the duty of your accountant to keep accounting and records of your business.
Furthermore, it is his responsibility to:
- Maintain all the accounting books and records required by company law
- ensure that all the figures in the accounting books are accurate, simple and easy to understand
- prepare monthly bank reconciliation statements
Most importantly, the accountant can ensure that any information required by any government agency, such as the tax office, are readily made available to them.
Hire an accountant: Tax matters
Another reason you need to hire an accountant is that he can help you to handle your tax matters.
For instance, it is his responsibility to:
- prepare your annual accounts for your business
- work out how much tax your business will pay.
- File the annual tax returns of your business in accordance with existing regulations
- ensure that final tax payable by your business is paid promptly.
- And that income taxes deducted from your employees are remitted to the tax authorities.
Most importantly, he can ensure that there is a good relationship between your business and the tax office.
Will help to supervise the jobs done by other employees
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
An accountant can always help you to ensure that you meet critical deadlines that will help you to keep your customers.
Therefore, your accountant if well motivated can double both as an Accountant and Internal Auditor, all for the good of your business.
Hire an accountant: Manage Pay Roll
Salaries and wages are a major component of your business expenses.
Unfortunately, this is one of the business expenses you cannot run away from.
Consequently, the pay roll of your employees need to be properly computed by the salaries and wages clerk.
Thereafter. the pay roll need to be scrutinized and verified by your accountant.
To this end, the accountant has to certify that:
- employees in your business are registered under the current tax system
- new employees are enrolled
- workers are properly placed on the right scale of the salary structure
- employees’ pay rolls are prepared correctly
- legitimate deductions are made from employees
- all outgoing payments are approved by you.
- Payments go to the right recipients
- all chances of frauds errors and omissions reduced to the barest minimum
Therefore, you need to hire an accountant that help you to design and implement effective and efficient internal control systems for all areas of your business.
Hire an accountant: to track your stocks and inventory.
In a small business such as your, your accountant can help to track your stocks and inventories.
For example, he can help you to:
- design stocks records
- ensure that stocks are secure and safe
- Maintain assets register
- recommend inventory management software for your merchandise
Furthermore, once a while, the accountant can carry out physical inspection of your business assets to make sure that they are available in their respective locations. And that they are perfect working conditions.
Hire An accountant: improve efficiency
An accountant can help you to improve on your business efficiency, especially where money is concerned.
For example, he can give or make recommendations to you on all matters concerning money.
Furthermore, he can suggest ways to reduce costs and increase revenue
Most importantly, he can offer useful advice or suggestions in the following circumstances:
- when you want to diversify into other businesses
- make investments decisions, such as investment in securities
- when you need to do cost and benefit analysis
- interpret financial statements
- calculate important ratios for decision making.
Hire an accountant: Prepare financial statements
You will need to hire an accountant that can prepare periodic or annual financial statements for your business.
Usually, annual financial statements for a small business will comprise of:
- Trading account
- Profit and Loss Account
- Balance Sheets
Moreover, when accountant prepares the prepare annual financial statements for your business, it will be easy for external auditors to finalize the accounts in record time.
Furthermore, external auditors will charge you less audit fees to prepare the final accounts of your business.
This is because your accountant will have done more than half of the job before you invite them.
Remember that, if you are running a business without keeping accurate accounting records, you will not know the:
- direction your business is going
- the rate at which it is growing
- or how fast it is retrogressing.
In other words, you are like a pilot trying to fly an airplane without a compass.
Relationship with your Accountant
For best results, you should ensure that there is a good working relationship with your accountant.
In other words, you need to see your accountant as a development and growth partner.
However, the quality of services you get from your accountant will depend on:
- the level of trust,
- and working relationship
between you and your accountant.
Hire an accountant: Your take away
Firstly, you should not spend your business capital recklessly because the business belongs to you
Secondly, if you do not allow him to do his job in a professional manner, you will be hurting your business without knowing it.
Thirdly, an accountant is someone trained in Financial and Cost accounting and other related subjects.
Fourthly, you need to rely on the training and experience of your accountant.
The benefits you will get will be worth more than the few dollars you will pay an accountant to help you grow your business.
Can provide financial advice
You need to hire an accountant who can give you advice when you want to make strategic financial decisions.
For example, you might have idle cash that you do not intend to use any time soon.
Your accountant can advice you whether to invest the funds in:
- Short-term securities
- Ordinary Shares
- Federal Government Bonds
- Ethical and money market funds
Beyond that, if you are involved in manufacturing, your accountant can help you with costing details you need to make good business decisions.
Most importantly, he can help you to do costs and benefits analysis if you want to make investment decisions.
Controlling income and expenditure
You need to hire an accountant that can help you to control the income and expenses of your business.
This he can do by preparing budgets, identifying and keeping his eyes on all possible sources of revenue for your business.
Furthermore, the accountant can ensure that the expenses of your business are brought under proper control in order to avoid losses due to bloated or fake invoices.
Hire an accountant: auditing financial information
An accountant can help you to audit financial information.
For example, you might receive a set of financial statements from a firm you want to invest in.
It is the duty and responsibility of the accountant to examine, analyze the financial statements and to draw attention to critical areas that matters to you.
Financial forecasting and risk analysis
Financial forecasting and risk analysis are important roles your accountant can contribute to the success of your business.
Your accountant can help you to make, production. demand and sales forecasts.
Going further, you might have two or more investment options to choose from.
The Accountant knows all tools needed to estimate and calculate risk factors that you probably never thought of.
Negotiating the terms of business deals
Negotiating favorable terms with your suppliers is another area your accountant can be very useful.
He can do this because he is in a position to know the position and direction of your business.
Often times, he will be involved in drafting your business plans, especially marketing and sales strategies.
So the accountant is one who is knowledgeable all all areas of business management.
By Samuel Ijenhi
B. Sc. Accounting [University of Benin]
Benin City, Nigeria.
Founder: Ijenhi Business Solutions