What Do I Need to Know to Better Understand My Accountant?
They say that the relationship you have with your accountant should be intimate and close and similar to the one you have with your personal doctor. And it is true because the health of your finances depends on it.
So, here, we tell you how you can better understand this key professional for your business – your accountant.
According to recent data, it is estimated that around 80% of microbusinesses do not have any formal accounting oversight, usually done by qualified accountants such as www.gsmaccountants.co.uk.
This is something which hinders their survival by not knowing clearly how much they earn or lose, on what and how they spend their resources, or what their real business operating costs are.
You and your accountant
It is essential that the entrepreneur works hand in hand with an accountant, who will help them to understand the economic situation of their enterprise, to measure the results of the implemented strategies, and to comply with the financial obligations related to the business.
While it is true that this task should be left to a professional, it is also your responsibility, as an entrepreneur, to know certain aspects of accounting and tax so that you will have the ability to demand information that is essential to make timely decisions for the benefit of your business.
What should I know about accounting?
It is important to know the four financial statements that serve to understand the stability and solvency of a company. With them, it is possible to measure, control and improve the income and expenses that are generated in the business.
- Balance sheet: This shows the economic resources of the company and consists of assets (your assets), liabilities (debts) and capital (equity).
- Income statement: This is a report of income, costs, expenses and the profit or loss of the company.
- Statement of changes in the financial situation: This shows the variations suffered by the value of what the company owns.
- Statement of changes in stockholders ‘equity: This shows changes in the owners’ investment in the period.
Other accounting-related factors which can impact your business
In addition to these accounting concepts, you must have information on the dates of compliance with tax obligations (tax payment, presentation of statements, etc.) and any new provisions that can cause problems in your company, such as:
- Electronic invoicing: issuing Digital Tax Vouchers over the Internet.
- Electronic payroll receipts: giving your workers proof of payment.
- Electronic accounting: sending your balance of verification, catalogue of accounts and policies to the fiscal authority if they are required.
Finally, organisation is a vital aspect in accounting issues, so you must order by month all documents that are delivered to the accountant: invoices, receipts and all receipts of income and expenses.