What Does an Accountant do for Businesses?
What does an accountant do? In a lot of companies, it’s a whole team of people that help out in the accounting side of the business. It’s the back of the house type business. There are several different things that they should be working out.
First, they should be putting together your financial reporting package. And that’s your standard financial and non-financial information. This tells you about the financial health of your business.
It’ll also be things like:
- Income statement
- Balance sheet
- Looking at your cash flows
- Example: any large customers that have balances outstanding
- Your DSO (an account receivable metric)
- Inventory reporting
- Forecast of new sales
You should have a monthly reporting package that your accounting team puts together. That’s one of the most important duties of an accountant.
What Does An Accountant Do For Internal Control?
The next thing that they’re going to do is looking at the internal controls of the organization.
That’s establishing control over:
- The cash and other assets of the business
- Your business-sensitive information
- Who can pay bills and who can allow people
- The bank to sending your money to some other place
- Who’s signing up people on your payroll system.
You want to have control over that so that your funds, your cash, and your business doesn’t go away. It stays within the business or is only released when you, the owner authorizes. So make sure that the accounting department is maintaining and evaluating your system of internal controls.
An accounting department is going to look at the banking side of things. And also scheduling when you’re going to need cash.
They’ll look at:
- If you have a line of credit
- Money getting taken out of that line of credit
- Your bank reconciliations
Accountants and Taxes
You’re going to want your accounting team to look at the tax administration. There’s a lot of tax duties that go on all year round, there’s:
- Income tax, on a federal and state basis
- Sales tax, on a regular basis
- Property tax reporting
So you want to make sure you have that tax calendar set up and your accounting team is monitoring it. This will make sure that things are being done on time.
If you have a larger company, the accountant may have to do some department management. You’re hiring and training the people that you hired in the business. Make sure that they have the right skills. And, that they’re staying up to speed on the different accounting and tax rules that are out there.
You want to make sure that your team is knowledgeable and prepared to do the job. And aside from that, there are always special projects in the accounting area.
Your accountant’s going to be doing a profitability analysis or doing a tax study. This is to say, “Hey, how can I save money on taxes? We’re on a whole bunch of other special projects.”
There are always special projects in the accounting side of the business. That’s what they’re going to be working on.
How much does an accountant charge?
In a nutshell, it depends. It depends on the complexity of the business and what you want that person does.
Usually, for a very reasonable fee, you get a lot out of an accountant. Especially if say they’re doing your taxes. This way they’re doing some research in understanding your situation. Then they can save you money in the long run by reducing your taxes. Or, keeping track of your finance in a way that you can understand them and maximize your business.
You’ll always get what you pay for. So find a good accountant and pay them what they’re worth.