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John Lawson
John Lawson

Accounting – All You Need to Know

You’re running a medium-sized business and have been keeping up with your bank account needs and invoices so far. However, you’re looking to expand – with your sales picking up and the business expanding its clientele pool. You’ve also been spending more time on the not-so-exciting side of entrepreneurship.

You’re perhaps, also, already knee-deep in accounts receivables1, accounts payable and numerous receipts – struggling with unending bills, pay stubs, and tax issues. You’ve tried seeking professional help, but that’s another bill added to your mountain of debts.

Well, you need to hire a trusted and professional accountant to help you tackle all these problems. Unlike hiring a freelance professional financial adviser, an accountant will cost you less and also be the God-sent help you desperately need.

With that said, here’s all you need to know about accountants.

All About Accounting

Accounting is the love language of finance and business. It’s an essential and legal requirement for accounting firms, SMEs, or individual companies. When you opt to skip critical steps, falsify information, and ignore the code and principles given, you can end up with a pile of legal bills, thus costing your firm thousands. 

What Does an Accountant Do?

Certified Public Accountants (CPAs) 2are professionals who handle the bookkeeping and works on your balance sheets, profit-and-loss statements, and other critical financially-related papers.

They also perform audits, handle personal tax accounts, help in filing tax returns, and work on any financial work that’s part of running your firm – they’re the financial nerd you need to make sure your business runs smoothly.

These professionals have an extensive understanding of financial and legal issues. They’re legally responsible for their clientele to offer unbiased information and avoid negligence at work. Based on what the needs of your firm, some accountants can also act as a liaison between your enterprise and third-party vendors, consumers, and financial organisations.

The Value of Accountants

Certified Public Accountants must have at least 40 hours of Continuing Professional Education (CPE) to maintain their license.

CPE allows an accountant to keep up with the daily financial news, recent economic developments, and the reporting requirements in the finance industry. Therefore, most CPAs have to keep up with their education to stay certified. It’s why they’re the industry experts and valuable to you and your business.

Types of Accountants

Various accountants have different responsibilities. Nonetheless, there are three distinctions you need to know and choose, based on the needs of your company:

Bookkeepers3: They’re not all certified accountants, but accountants can also be bookkeepers. They handle tasks like bill payments or keeping up with the weekly reports. While most bookkeepers are experts on handling several financial tasks, they’re not legally needed to hold licenses that enable them to manage your taxes.

Certified Public Accountant (CPA): They’re certified through the state via particular exams and licensing requirements. They can prepare and sign your tax returns and also represent you before Her Majesty’s Revenue and Customs (HMRC), IRS, or your local tax-enforcing body for audit purposes – they’re basically personal tax accountants.

Enrolled Agent: They have to pass an extensive examination that tackles personal and business tax laws. Like CPAs, enrolled agents are also legally allowed to help you prepare your tax returns, but they can’t sign them. They also have to meet the continuing education needs to maintain their licenses and can be your representative before HMRC or your local federal tax-enforcing body after auditing.

Why You Need to Hire an Accountant

As an entrepreneur, you wear lots of hats and often struggle with delegating some of the control to others – the firm is your baby, anyway.

Financial matters are hectic, so you’re looking for a way to solve all these issues. Well, here are the reasons you need to hire a trusted accountant for your business:

1. Accountants Help You Save on Time

In business, there are lots of tasks to be handled, from public relations, accounts, marketing, among other things. Hiring an accountant will help you save on time since they make sure you fill out financial forms correctly and ensure you also meet the critical deadlines.

2. CPAs Help You Save Money

When you try to handle all tasks alone, you can end up filling forms incorrectly or fail to follow the stipulated guidelines.

With a trusted accountant, however, you can relax since he/she will help you track all your invoices, ensure that you’re up-to-date with all the tax requirements4, and help you take advantage of any legal benefits.

3. Accountants Offer Unbiased Advice

Sometimes you can experience a substantial financial windfall, but having an accountant can help you have all your ducks in a row.

They’re required to offer you unbiased information regarding your finances and when providing their input on various issues. They also provide you with solutions based on sound and number-driven evidence. So you can rest easy knowing you’re safe.

4. CPAs Help Settle Your Worries

Financial responsibilities are the most daunting part of any business or even personal life. A CPA helps in relieving your stresses, and they act as your financial mentor and help you effortlessly navigate through the difficult and stressful financial situations.

5. CPAs Also Offer New Information

Dealing with taxes can be tricky, especially when you have a small business. An accountant helps in keeping you in compliance with tax laws by calculating payroll taxes for your staff or staying up-to-date with the sales tax changes for each of your products and services.

Frequently Asked Questions

Are You Required to Hire an Accountant?
What does it mean to be a Chartered Accountant?
Can You Do Accounting on Your Own?
What are the Different Types of Accountants?
Are There Different Certificates Other Than the Certified Public Accountant (CPA)?
How Can Outsourcing Your Accounting Department Help Your Business?
John lawson rndlg

John Lawson

John advises business, individuals, and organisations on pension planning. As you’ve probably realised by now, we’re invested in helping people like yourself understand a little bit more about how equity release options work.
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