Every business has an objective to earn profit but only selling thing on adequate profit margin will never let you earn the right profit. Because there are many hidden costs and government taxation, you need to consider while making your feasibility. Even they became more complex when your revenue starts increasing. It is always advisable that you must have one person who can be a good help in such a situation. This is the reason that even small business also hires a small business accountant to look after their financial activities. The accountant is very crucial for the smooth operation of small businesses because they help them to keep their financial statements aligned as per regulations that help them to save money and also avoiding any legal complications in the longer run. Certain peculiar activities make the accountant role very important for the businesses;
- Financial Data: Financial Data like cash flow, financial statement, banking documents etc. are very critical and confidential information. Every business needs to keep its financial records undercover, not everybody can be trusted with the financial data. Usually in small businesses also, the accountant is the custodian of all types of financial data and documents. The confidentiality of this document is very important for the smooth operations and nobody wants to make it public.
- Financial Advice: The accountant is in a good position to give beneficial financial advice, as they have complete visibility about the financial condition of the business. They can advise the business owner about their plans. They can also help to advise on taxation matters. This can help the business owner to save tax legally. The financial advice of the accountant will help the business owner to make the right decision regarding their future. An accountant may also help the business owner to get the right external financing for business expansion. They can make feasibilities for the new venture and let the management know which business venture will be more profitable in future.
- Financial Report: The accountant will prepare monthly, the quarterly or yearly financial statement of the company. The report is usually shared with business owners or other concerned stakeholders of the business. Financial reporting is very critical because the business will be paying taxes based on their financial performance. Financial reporting will indicate the company financial health and will also be a good tool, to attract new investors for future ventures.
- Regulatory Compliance: For every business, preparation of the financial report and timely submission is mandatory for regulatory compliance. In case if the reports are not submitted on time or if there are erroneous reporting to the tax department. That can result in serious tax or legal implications. The financial penalties in those scenarios are very high that can even shut down small businesses. It means that a qualified accountant is mandatory for the survival of business under regulations and law. They can assist in designing the business as per guidelines given in business and government laws.