Once a business reaches a certain revenue threshold, extra financial assistance becomes vital. Contrary to what some may believe, accountants are responsible for much more than keeping track of income. These professionals can help improve business efficiency, keep track of tax obligations and examine the accuracy of statements. Having a grip on each of these areas can be the very thing that ensures that a company continues to thrive.
Offer Cost Reduction Assistance
Accountants can help businesses become more efficient by assisting them with cost reduction. They can analyze budgets and spending habits, much like financial advisors. They can also make suggestions on whether or not certain costs can either be reduced or eliminated.
For example, a clothing store may be spending an excessive amount of money in advertising a certain product. The bookkeeper can look through the financial statements and compare the amount of money being made from the product and the amount of money being used to market it. They may find that this form of marketing is taking an economic toll on the company. In this case, they may suggest that the money should be used differently or that the advertising plan should be significantly adjusted.
Provide Much-Needed Tax Help
Accountants can also help businesses keep track of their tax obligations. This is extremely beneficial to the well-being of a company, as ongoing tax issues can significantly damage a company’s viability. Financial analysts can assume the responsibility of properly calculating tax obligations, along with disbursing payments promptly.
Having accurate statements is essential. In fact, this is probably one of the most important services these professionals can provide. Keeping accurate records can help pinpoint internal illegal activities and costly mistakes before they get out of hand.
Corporate abuse of finances can leave a business in a financial mess and jeopardize or ruin its reputation. Consider the 2001 Enron scandal. According to CNN.com, Enron was once number seven on the Fortune 500 list, raking in hundreds of billions of dollars in revenue. It was later found that several executives, including the company’s CEO, were involved in a major fraud and embezzlement scheme. To this day, the company has not recovered and is now defunct.
Keep Financial Errors to a Minimum
Financial errors can also jeopardize a business. For instance, a new company that has been experiencing consistent financial growth decides that they want to purchase a new facility. However, after making the purchase, it is discovered that there was a significant error in their asset value calculations. Now, they are stuck with a mortgage on a facility and a much smaller safety net.