Pivotal Role of Accountants/Bookkeepers in Success of Business
Your firm’s financial health is what determines its robust growth in the longer run. The more rigorous and through it is, the more the business can expand and thrive. All companies need bookkeepers/accountants to manage the financial aspects and today, we are here to discuss about the vital role they play in the success of your business.
An accountant provides services to a business’ financial activities. An accountant manages all the financial data such as reports, analysis, list of assets, debts, profits and liabilities. All these data are crucial for decision-making that ultimately lead to success of the business. Depending on the size of the business, an accountant can assume various duties ranging from financial data collector to strategist and financial interpreter.
An accountant primarily keeps a track of these records.
1. Profit and loss account
2. Balance sheet
3. Cash flow statement
These three together form the financial statements of a business. All these are required by the stakeholders to evaluate the success of the firm and plan the future moves. Accuracy of financial statements is essential in forming the future strategies, as the management is heavily dependent on the financial data accounting provides.
The international business has evolved by huge proportions in the recent years, owing to developments in technology. The scope of business has increased by many folds and this is making the management dependent on accounting data for forming various decisions, in face of changing global economy.
An accountant is essential to evaluate the performance of a business. Financial position of an organization is determined from the data recoded by an accountant. The profit and loss statements help the management determine the performance of a business. Also, the current data can be compared to the previous data and budget for a variance analysis. This factor determines the growth curve of an organization.
The cash flow is to be monitored with great care so as to keep the firm’s finances afloat. Hence an accountant is responsible for taking care of the working capital and cash needs of an organization.
Another important role an account plays is monitoring and managing the liabilities. Not taking care of liabilities can jeopardize the company’s future. Hence, all the liabilities, such as income tax, sales tax, pension fund, provident fund and likes, are to be paid on proper time. An accountant is responsible for making all these payments on time and keeping the firm to be statutory compliant.
A new year for a business starts with the financial year and allotment of budget is the first task that gets done. An accountant plays a huge role in shaping the budget, thus forming a major part of business decisions. Also, future business trends are determined from the past data produced by the accountant.