Setting up a business is one of the most intriguing ventures for most individuals nowadays. Since you are risking all your savings into opening up a business, you want it to become successful. But not every business owner is fortunate enough to achieve success in their endeavors. Hence, here comes the role of an accountant. He is the one person who can make your business achieve its objectives and make it profitable. Accountants are not only important for a new business owner but they are equally important for any company that is running at a loss. This is so because they can determine why a company is not doing well in business or why sales are dropping and profit margins are decreasing. All in all, they are a very valuable asset of the company that can lead businesses on the road to success.
Accounting is, therefore, a very lucrative profession, If you want to pursue a career of becoming an accountant then there are some top universities in which you can apply and fulfill your dream of becoming a professional accountant.
Here’s some insight into the professional life of an excellent accountant and the responsibilities that they shoulder in making companies maximize their profits:
- Analyzing Expenses
Accountants can help their employers in many ways and save them from making quick and loss bearing decisions. They step in to assess company accounts and expenses and identify money outflows that are anomalous or simply not generating profits. You can have your accountant help with some business turnaround consulting as well. They can look at all the accounts receivable and different expenses to help turnaround your business for a more significant profit.
Analyzing these company expenses and pointing out the areas where there is potential to either downsize or eliminate expenditure is one of the basic approaches of any accountant. On many occasions, new start-ups that are unaware of how to manage their expenses fall in this pit of extravagance. In an attempt to stand out, they dismiss the purpose of setting up a business. Accountants can help them get back on track. So analyzing your company expenses can sort most or all of your problems with minimal effort.
- Bad Debt Management
Companies often tend to make investments without scaling profit margins and end up in loss. By bringing in an accountant, one can realize that they should pay more thought into their investments to avoid going bankrupt.
Investments made as a favor to a fellow or on an unreliable business plan can make you lose enormous sums without you even realizing it. Accountants draw these conclusions from company accounts and advise you accordingly. If you don’t want to cease all cash outflows, then they can devise an investment plan with minimal or no loss in mind based on the company dynamics. This can allow you to continue funding without losing assets and experiencing a decline in share values.
The bigger your investments are the more difficult it gets for you to manage your taxes. However, accountants are individuals that specialize in doing this for you. They calculate the cumulative value of your goods on which taxes are applicable and advise you on where and how you could avoid them.
Besides this, they use these figures to calculate your tax returns so that you can manage your finances accordingly. This way, you get to keep a smooth track of where you could save money and can integrate tax returns into your future investments. All thanks to a good accountant, for managing your company’s finances properly.
- Labor Costs
Large company owners may fail to realize this, but an effective and efficient workforce can always be marginalized by the size and amount of work hours. If you have more workers than the work, you should consider scaling them down. Or if there are excess work hours for which you are paying, you can always increase the workload per worker to get the job done faster.
All these plans can be easily assessed and reformed by an experienced accountant that you bring on board. They can tell you what you should address as excess fat and cut down on to save your money by looking at the company logs and accounts.
- Terminate Unprofitable Services
The owner may fail to identify services and products that are no longer generating any profits and should be terminated. Accountants draw charts and figures from the company records to measure and outline any project or service the company is carrying out which is not generating enough profit. These services not only eat away from the investment budget but can also affect the profits generated by other products and services.
Without the assistance of a good accountant, owners can lead to assuming that most or none of their services are giving them any returns. Hence, making the role of an accountant pivotal in this situation to help you cut on your losses and start generating reasonable profits.
- Restructuring Finances
Another significant aspect of running any business successfully is to restructure your finances after periodic intervals depending on the state of your returns. Most businessmen turn away from their finances after establishing a business. As a result, investments on outdated goods and costly services slowly chip away at the company’s finances.
This is where an accountant can come in handy and not only help to redesign your investment plans, but also rescale your expenditures by making them more focused on products that are generating greater profits. Also, they can draft a chart exhibiting the expected profits on a quarterly and yearly basis so that you can proceed accordingly. And if something doesn’t add up, you will know that something isn’t right and can work towards identifying and eliminating that problem.
- Marketing Investments and Returns
Every company brings on-board a marketing team that works on not just establishing a good image of the company in the market but also make the company more presentable for clients. The purpose of these marketing campaigns is to bring more business and help generate greater revenues for the company. However, this isn’t generally the case if they are not well maintained.
Accountants can review your investments on these marketing campaigns and teams and advise you on how you should proceed with your investments on them. If marketing campaigns are not bringing you good business, they aren’t meeting your desired expectations. In such a situation, you should consider scaling them down or reinvigorating the marketing team working for you. Consequently, making a drastic impact on your state of finances.
- Maximize Pricing
Once a product or service is launched in the market, messing around with its selling cost can lose you valuable customers who just started using that product. However, it happens most often that the company owners grow old and can’t keep up with the cost price determining algorithms. As a result, their product selling price remains the same or slightly differs from what they started with.
Accountants can step in and identify these problems in which companies that should be generating greater profits are struggling due to low selling prices. They can suggest a reasonable increase in selling price so that higher selling prices can generate more net sales.
- Assess Competition
It is easy to avoid considering your competition for business giants once they are settled. However, this is one of the biggest mistakes they commit since it is very important to provide the best quality product at the best possible price.
Accountants can offer their expertise in this area. They can survey the market and provide you with an investment figure that will be most feasible for your company. Also, they can predict your break-even points and the number of sales you need to make before you start generating any noticeable profits. It may seem insignificant but this can change the outlook of your finances.
- Identify Assets and Valuable Customers
Valuing your customers and accommodating their needs should be your primary objective as a company. If you fail to deliver the best customer service and quality products then your loyal customers can turn away from your brand.
Accountants can help you draft market surveys to ensure that your regular customers have good reasons to remain loyal and are satisfied with your services and products. This can concrete your sales and allow you to make substantial profits.
In a nutshell, hiring an accountant at least once a year is something that businessmen should consider to maximize their profits and rejuvenate their company’s status. Considering the vitality of this position for companies, it is a much-secured profession. Hopefully, with the help of the above information, you can analyze your company’s situation if you are a business owner whether you need to hire a professional accountant to make your business successful. Or if you are looking for a lucrative business, the accounting profession might be the best career option for you.