The importance of accounting

The reason accounting is important, it is a pivotal aspect of the business that essentially allows it to function. It does this by keeping tabs on the influx of money coming in and out of the business. Tracking income and expenses, and verifying compliance while providing all parties involved with the necessary information to make the correct business decisions.

What type of accounting do new businesses use?

Generally, small businesses can use either cash or accrual accounting methods. A small business accountant is responsible for recording, analysing and reporting the business's financial transactions. The numbers which are collected are converted into an understandable statement for the business owner to decipher.

Tips for choosing an accountant

Working with reliable individuals is paramount to the success of your new business, this is why you need to do the required research to find the perfect fit for you. The following tips should help you find the right accountant. 

1. Make sure you know what you need

When handpicking your accountant, you will have to identify what type of tasks and responsibilities you expect the accountant to perform for your business. Whether that entails bookkeeping tasks, or if you require monthly financial statements to be completed, a bookkeeper can be recruited rather than a start-up accountant.

If you require advice regarding your tax, preparing tax returns, and auditing financials, you will need a certified public accountant (CPA).

2. Look for small business experience

When in search of financial expertise for your new business, steer clear of the big accounting firms, because you will need an accountant which has experience with working with new businesses preferably in the same or similar industry.

The knowledge and expertise they have gathered will be important in helping your business avoid possible mistakes and mishaps they have come across in the past, being proactive and identifying issues before they escalate into larger problems. These decisions essentially fast track the growth of your business by making the right financial decisions.

3. Ask for recommendations

When purchasing a product, consumers often seek out product reviews to get an understanding of the performance of that particular product. Speaking to other trusted business owners and receiving recommendations about who to approach and use, your peers will always give your trustworthy advice as well as recommendations.

4. Compare fees

Before making a decision it is important to make sure how your shortlisted accountant plans to bill you.  Different accountants charge different rates, whether it be a fixed monthly fee to complete all your bookkeeping, but may add an additional fee for completing and submitting compliance documents. The fee for each service varies based on what services are provided and the qualifications of the person providing the services. Not all accountants and accounting firms charge the same fee for their services.

The three most important things your accountant should do

Along with having numeric skills, being computer literate and having business awareness, your accountant will need to complete important tasks for your business. Maintaining major financial reports. Preparing taxes and monitoring payments. Analysing the operations of an organisation’s finances and recommending best practices, identifying problems, and strategising solutions.

Importance of learning and understanding accounting as a business owner

Having an understanding of accounting and being aware of what needs to be done eliminates the risk of your accountant falling behind on their work. Being able to hold them accountable helps maintain their performance. As a new business, the managers are now also able to make future projections and do so by making predictions using accounting practices. In addition to being necessary for a business's immediate financial health, being familiar with accounting is also an important strategic tool to utilise and understand to grow your business.

Conclusion

While not being a straightforward recruitment process, with the help of the tips your search will be simplified if you follow the steps provided.

As stated, accountants play an integral role in your business's success and growth, with the right accountant the sky's the limit. Placing all the responsibility on the accountant though will not ensure your success, you will be required to bring your end of the bargain by providing a suitable environment for your business to succeed.