An accountant has many responsibilities, but these depend on who hires them and under what conditions. Accountants can be employed by large scale firms or individual clients who want their financial situation managed.
An accountant’s role is to audit accounts, undertake financial management, and provide financial advice to their employers.
However, there are many things that accountants should do that we often forget. So, let’s look at what an accountant should do for you.
1. Prepare Accounts For Tax Returns
Since an accountant is responsible for handling accounts, they also process and prepare accounts for annual tax returns. Each year the general public, as well as UK companies, have to file for tax returns, and it is the job of an accountant to handle the balance sheets.
In preparing accounts for tax returns, the accountant is also responsible for making appropriate ledgers, auditing financial information, and filing the taxed incomes according to each tax bracket. Therefore, people hire accountants do not have to deal with the lengthy process of filing their taxes. Paul Reed from Reed & Co had this to say: “The job of an accountant is to save their clients money, whilst following all the rules and regulations around taxation.”
2. Ensuring Financial Accuracy
Another thing that an accountant is supposed to do for you is to ensure that all the numbers filled in the accounts are accurate. They have to cross-check all balance sheets and payrolls in order to keep the accounts as clean as possible. This is to ensure a smooth-running procedure when displaying accounts either for tax returns or for credit reports.
Ensuring financial accuracy is also super important for the accountant so that no legal issue arises. There are specific laws regarding accountancy that the accountants must follow, and accuracy is one part of those laws. Suppose the accountant does not abide by the laws of accuracy. In that case, it can become a sizeable legal case for your entity and for the accountant him/herself.
3. On-Time Tax Payment
Since accountants are heavily responsible for tax filing, they are also responsible for timely tax submission. In the UK, deadlines matter! So, if you want your taxes to be processed by the UK’s ministry of finance, then your account must make sure that you pay your taxes on time. The accountant is also supposed to make sure that the taxes are paid correctly.
The accountant is supposed to point out any discrepancy between the amount of taxes you have paid and the amount of income you have earned. So, if you are in any way evading taxes, the accountant is supposed to let you know and help you resolve your taxation problems. In this way, although accountants are hired on a contractual basis, they will count as part of your financial staff.
Similarly, many accountants work freelance or will work as consultants in order to guide people about their financial matters. They can also tell you what your spending patterns are like and where you are spending most of your money. Consequently, they can let you know how to cut costs if you are a large scale company. If you are an individual, they can simply ask you to slow down on shopping!
4. Providing Guidance On Business Matters
An accountant is not only there for you to hand them the company’s balance sheets. They are also there to advise you on what methods you can employ to cut costs, breakeven, maximize profits, or enhance revenues. These responsibilities are mostly attached to an accountant who works with large scale businesses and firms.
For example, suppose you are a company that produces a million tons of cotton each year. In that case, your profits are running lower and lower every 6 months. The accountant can most likely let you know what you’re doing wrong or the redundancy costs of your production. This way, you can potentially increase your profit margins and create a workflow that does not eat up all your capital.
5. Future Forecasting
Finally, accountants are responsible for coming up with a forecast report on your financial situation. So, they can give you information on matters like future investments and spending or if you’re looking to expand and diversify your business. With such heavy capital at stake, an accountant is beneficial. They can be a great help with auditing your current revenues and figuring out the exact amount that your business needs to stay afloat or to profit immensely.
Accountants should also provide you with projections. These can include six months, yearly or quarterly projections of sales, profits, and losses based on current trends. This will also allow you to make a wiser decision on where to put your money and how to manage it. So, the next time your account tells you to invest in something, do it!