If, as is often quoted, money makes the world go round, then if you are in business, you need a highly developed understanding not only of how to make money but also of how to make it work to your best advantage.
Without a sound financial basis to your business – and it could be in the commercial or public sector, a not-for-profit organization, or an academic institution – you could get yourself into serious trouble. This is why accountants are so important in any business.
Using a professional accountant
All businesses, large or small, legally have to report their financial situation at the year-end. Financial regulations can be highly complex, and you may not feel, as an entrepreneur or a high-level manager, that you are equipped to deal with the intricacies of these.
Professional accountants are extremely well trained, and the best understand the nuances of tax regimes, auditing, investment opportunities (in tandem with financial advice specialists), and the many other issues that may arise in the finance side of a business.
Their main role within a business is to safeguard the integrity of financial reporting, and they are on the frontline of this. Financial information produced by a business is the responsibility of management, so you need to take a close interest in what is being produced and how it is being done. Your business will produce numbers and figures, and your accountant will crunch this information, put it into the appropriate reporting form, and then be in the position to defend the quality of that financial reporting all the way to the original source.
If they get it wrong, then your business could be liable for financial penalties, possible investigation by the tax authorities and, in the worst-case scenario, end in bankruptcy.
Services that accountants provide
Accountants are problem solvers, and their training enables them to adopt an objective and pragmatic approach to their work. Training can be done through colleges and universities and can frequently be accessed through online learning courses such as Maryville’s online bachelor’s degree in accounting.
Training and examinations are rigorous to ensure that all successful graduates have a clear understanding of what will be required of them when they begin to work as professional accountants.
Many accountants will be employed directly within a business, getting to understand in depth what your company does, the environments in which it operates, and its business and financial goals. They can help with corporate strategy and give advice that will help you to reduce costs, mitigate risks, and improve your top line.
An accountant may sit on the company’s board, providing an essential financial overview to other board members, or be part of the recruitment panel for appointing a new CEO. A professional accountant will be involved with all aspects of business, setting budgets with other members of the senior management team, keeping an eye on cost centers of the departments that make up the business, and helping to drive the business’s strategic direction.
You need a firm hand on the financial tiller to ensure that opportunities for sensible cost reduction are maximized and that profitability targets are met. A keen, analytical mind is an essential part of your financial operations.
Professional accountants should also be able to explain to people that don’t have their fiscal expertise why they are doing particular things and suggesting specific courses of action. This, in particular, is in the interests of transparency. If you don’t clearly understand what the various financial factors are that relate to your business, then you are not doing your job properly. Managing directors and accountants don’t necessarily have to be joined at the hip, but they do need to have clear lines of communication so that all the implications of financial decisions and their potential consequences are understood.
Public interest
Accountants have multifaceted roles, and their profession owes a duty to the general public as well as to the businesses that they work for. They should maintain high standards and also have an important role in helping businesses to act ethically. If people don’t trust accountants to be honest, and there are many who are uncertain as to the ethical position of some accountancy firms, then public trust can easily be lost. Good practice and transparency can help avoid that mistrust.
A key ingredient of a successful business is in its financial operations, and it’s where professional accountants can make the difference between your business being a highly successful and expanding organization and one that struggles to meet its financial targets.