Why Your Business Needs a Virtual Accountant   by Mike Dresslers

in Finance / Accounting    (submitted 2010-02-19)

Many companies do not survive financially because they fail to comply with correct accounting procedures. The accountant is pivotal to the success of a company because he is responsible for recording all financial activity on a daily basis as well as controlling the cash. The arguments for retaining a competent accountant are numerous, and I have outlined a few of them:
Accountants are responsible for publishing all company financial information in compliance with accepted practices. The development of all company financial information must adhere completely to the uniformly documented accounting formats. An accountant is careful to make sure that he prepares all company financial statements in accordance with the pertinent accounting rules. By following generally accepted accounting procedures, the accountant knows that he is portraying the financial condition of the entity correctly.
Another important function of the accountant is monitoring and approving all cash disbursements. The implementation of reliable safeguards to control the money is an important part of his job. A reliable system will help to avoid both mismanagement and even outright employee theft. The establishment of rigid controls for the issuance of checks will serve to prevent the possibility of illegal diversion of company cash. Strict internal regulations assist companies in reaching their short and long term targets. It is imperative that a company implements a reliable system for approving cash expenditures. The accountant is crucial to making sure this gets done correctly.
Another argument for a competent corporate accountant is the all important area of taxes. Correct tax planning allows the company to forecast sales and cash flows in the ensuing fiscal years. These forecasts can help the company take advantage of all allowable benefits that they are rightfully entitled to. An additional positive to this approach is that there will be more time available to spend on enhancing the company's profitability and cash flows. Making sure to file all tax returns on time will generate extra cash because this will avoid any undue charges for interest and late fees. By filing accurately, the company will be sure not to overpay tax obligations, which is costly because overpayments do not earn interest for the business.