Every company must be strong in four key areas to achieve sustained and profitable growth: financial, marketing and sales, operations or production, and human resources.
While finance is not the only key to success, it is necessary to achieve it.
Why do you really need an accountant in your company? What good is accounting and the information it offers? How much should you invest in your accounting? What requirements and what functions does an accountant perform in your company?
It is usual for small and medium businesses to see accounting as a “necessary evil” and hire external accountants such as accountants in central London to carry out the financial tasks, that is, “fiscal accounting”, to prepare and file monthly and annual tax returns.
When businesses start to grow they face the need to have certified or audited Financial Statements to later manage bank loans and this will lead them to look for more qualified professionals to meet these new requirements. Banks do not finance businesses or companies that do not have reliable financial information.
The foregoing is important for all businesses and are two of the reasons for hiring the services of qualified and experienced accountants. Every company, small or medium, should:
Keep accounting in accordance with the tax and commercial regulations required by the laws of each country.
Present the declarations of the different taxes in a timely manner, which must be duly supported.
Prepare periodic financial statements that banks will request to grant financing for working capital or investment.
But accounting must be seen by the business owner as filling an even greater need. It is about the need to have timely, reliable and useful financial information to support decision making and to control results.
Each month you must receive financial statements from your accountants, whether external or internal, to know the true financial situation of your company, economic results and how they are managing the cash flow and capital in your business.
What should you expect from your accountant?
When you have a small business, you can expect to hire the services of an external accountant. When the volume of documents and transactions is low, it will be enough for a professional to go through the documentation of the business and process it in his own office.
When the business grows, especially in businesses with a large volume of transactions such as restaurants, and retail stores, among others, external accountants might go through the documentation every week.
There might also come a time when the employer asks that the accounting be kept in the company itself, although the accountants remain external.
In any case, you should expect your accountants to have:
Knowledge on tax matters and experience to apply the rules that regulate your business activity.
Technical expertise and experience to process, in an accounting system, the documentation in such a way that an up-to-date and organised accounting can be maintained.
Professional capacity to prepare and explain the three basic Financial Statements each month, and thus support you with useful and reliable information to make sound decisions.
The quality of the decisions you make depends very much on the quality of the information you receive.
Do not skimp or underestimate the need for financial information from your own company. It’s your company, it’s your investment, you must know all the details about the finances of your business.
Although finance alone is not the key to success, effective accounting and financial data are essential to maintain your company on a path of sustained and profitable growth.