Understanding the Responsibilities of an Accountant in a Business

Understanding the Responsibilities of an Accountant in a Business

One of the most challenging aspects of being a business director is handling its accounts. While some business owners are capable of doing this, most aren’t. That is where accountants come in. Contrary to common belief, accountants have many more duties than just handling a business’s finances. Accountants are also responsible for tax returns, budget formation, and financial forecasting, as well as many other things. This article is for understanding the responsibilities of an accountant in a business .

Understanding the Responsibilities of an Accountant

Understanding the Responsibilities of an Accountant

Understanding the Responsibilities of an Accountant

If you are a business owner that is considering employing an account, you need to know exactly what their duties are. This article will explain them to you:

Preparing Tax Returns

Every year in April, a new tax year begins. If you don’t file your tax by HMRC’s deadline, then you can be fined, and even charged for tax evasion. Specialist chartered accountant services can prepare your business’s tax returns for you so that your tax return is filed on time. In addition to filing your tax return, accountants also apply for exemptions and discounts, reducing the amount of tax that you are required to pay. Unless you have an encyclopaedic knowledge of tax exemptions, there’s absolutely no chance that you will be able to reduce your tax bill as significantly as a chartered accountant can. It is their business to save you money.

Monitoring Spending

Another duty is to monitor your business’s spending. Some business owners are terrible with money. When these sort of people are given lots of it, it tends to disappear very quickly. Accountants will be able to monitor spending, offering their advice and input if notice bad spending patterns. Some business owners give their accountants full autonomy over their money so that they don’t fritter it away. When they need to use money, they approach their accountant and ask to access it. It is entirely up to you if you want this sort of arrangement with your accountant, however. It is not something that is enforced, but rather just recommended.

Budget Formation

In addition to offering their advice regarding one’s spending, accountants can also recommend suitable budgets. Many business owners find it very difficult to draft budgets for their businesses. The main reason for this is that in order to budget, business owners need to know what their business’s financial forecast is. This is something accountants specialise in. The formation of a budget can allow business owners to significantly reduce their spending and start saving, taking profit instead of making frequent losses.

Financial Performance

Accountants can through one’s books and determine a business’s viability and financial performance. Determining one’s financial performance is very important. If your business is underperforming, then it’s crucial that a change is made. One metric that is used to determine a business’s financial performance is ROI (return on investment). Your accountant might use this, or another, to establish whether or not your business is financially worthwhile. If it turns out that it isn’t, they may be able to offer their advice on a solution, as well as tell you how you can cut down on spending.

Risk Analysis

Accountants are also able to conduct risk analysis, determining whether or not specific investments or financial decisions are too risky for your business to make. Risk analysis is a very effective way of determining a decision’s financial viability. Risk analysis is also conducted on other areas of one’s business. Risk analysis is a very technical area that accountants specialise in. It’s not something that business owners should do themselves, because there’s a chance that they could make some kind of error. An error in determining something’s risk could be detrimental to its success.

Profit Maximisation

An accountant will be able to offer their advice on how you can maximise your business’s profits. They will sit down and go through all of your accounts, inspect your sales, and examine your business’s progress since it first began. If they see a pattern of failure, they will bring this up with you. They will also tell you any ways that you can cut down on the amount that you are spending and maximise your profit, such as getting your business’s stock from another supplier or finding another courier to work with. An accountant’s suggestions can completely transform your business, saving you a lot of money.

Financial Reports

Accountants can draft and complete financial reports for you. If you have investors that like to stay plugged into what’s going on in your business, then financial reports are very important. HMRC may also ask you for a financial report. Financial reports can be very difficult to draw up, especially if you haven’t got any training in completing them. Thankfully, an accountant’s financial report will be more than sufficient to give to any of these people or agencies. They will thoroughly check through their report to ensure that it is all in order.

Understanding the Responsibilities of an Accountant in a Business

Understanding the Responsibilities of an Accountant in a Business

Financial Statements

When you file your business’s annual tax return – and if you are a limited company financial statement – your accountant will check them through and ensure that they comply with any laws or regulations. This is very important. If you fall afoul of any of the rules outlined by HMRC and Companies House, you can get fined. Misleading them on your financial statements can even result in you being arrested if they consider that your deception is tax evasion. It can be very easy to make mistakes on financial reports, which is why it is always best to have a professional do them for you.

Accounts Systems

Something that your business needs is an accounts system. If your business’s accounts system is not up to date, then you will not be able to draw up accurate financial reports or determine how your business is performing financially. Well, an accountant can do this for you. In addition to helping to create your business’s accounts system, they can also update it, make changes, and remove things from it. In fact, they will handle it all for you, so you never need to lift a finger.

Accountants are a very valuable asset. Fortunately, it’s no longer necessary to hire one in person, which can be very costly. Now you can outsource your accounting needs to accounting agencies, that operate solely online. This allows you to save a lot of money and means that you don’t have to make frequent trips to meet your accountant in person.