Accountants in our modern society have repositioned themselves in such a way that the importance of accountants in the overall success of small businesses is becoming more glaring as the day passes. Gone are the days when the duties and responsibilities of accountants are confined to rambling with papers filled with outdated figures.
Nowadays, accountants are key catalysts to the successful running of a business. Accountants are now best described as partners to a business as typified by the varied duties and responsibilities performed by certified public accountants to ensure that small businesses in America and beyond succeeds.
8 DUTIES AND RESPONSIBILITIES OF A CHARTERED ACCOUNTANT
- 1. Risk assessment: the continual collapse of high profile companies made stakeholders to react and come up with what many consider to be a very complex rules and principles to follow as far as controlling a business is concerned. Although small businesses are exempt from following the rules as contained in Sarbanes-Oxley’s Act (SOX), but small companies that carry out proper risk assessment tend to outperform those that simply didn’t bother. The skill set of modern accountant includes large amount of risk, compliance and ethical issues thereby making the accountant even more valuable to the business community as a whole. This new risk analysis knowledge in the toolkit of chartered accountants makes their role and responsibility in risk analysis and assessment indispensable.
- 2. Project evaluation: accountants use capital budgeting technique to appraise and evaluate projects given prevailing and anticipated conditions. Financial details like projected cash-flows and non-financial information are used to assess the financial viability of a project. Accountants are well equipped to do this for small business owners who might not have the necessary skills to perform this relatively complex process of investment appraisal. Accountants also employ tools like sensitivity analysis to assess how sensitive the projected cash flow for example might be to change in some of the variables used in calculating the NPV of the project. Still on project evaluation, accountants perform cost-benefit analysis of a project and then advice the management.
- 3. Designing, implementing and monitoring AIS: in this age and time where relevant and timely information is king, a company that does not have a well-structured accounting information system would simply not be able to compete. Accountants being conversant with business processes and the language of business (accounting) play important roles in designing, implementing, and controlling accounting information system. Accountants as information measurement and management professionals ensure that the information management and control system of a company’s is closely aligned with the overall objectives of the business. The provision of advice on the security of accounting information system is also a major role of accountant in AIS.
- 4. Business analysis: the aim of business analysis is to obtain relevant information regarding the current strategic position of a company and then plan and develop suitable strategy that would help ensure that the business meets its objective. Accountants use their combined knowledge of; strategy, business, accounting and finance to perform complete x-ray on a business to determine the health condition of the business and thereafter produce credible result that can be used by management to make informed economic decision.
- 5. Strategy development: accountants through the analysis and evaluation of strategic options that are available to an organization determine the best strategic decision that would ensure that a company’s long term goal is achieved. Small business in America and indeed the whole world rely on the services of professional accountants when developing strategies that would stand the test of time.
- 6. Tax preparation: you will agree with me that tax year ends are usually the busiest time in the calendar of CPAs in America and every other parts of the world. Accountants are trained professionals that understand the intricacies involved in preparing tax returns. The costs of being subjected to tax audit is simply not worth the savings that a small business can make by not hiring a qualified accountant that would take the responsibility of preparing and filling a company’s annual returns in the stipulated format.
- 7. Preparation of annual statements: preparation of annual report is the traditional function of accountants. Small businesses that have plans to grow always think ahead of the park and keeping complete and accurate records of transaction pay off when the company will need it the most. A small company for example that wants to raise finance for expansion are usually asked by their bank to provide track record of business dealings. This is where having an accountant becomes handy; all that the small business needs to do is inform that accountant who would then pool the required information from the accounting software without incurring additional cost.
- 8. Cost savings: accounting is predominantly about cost savings and process improvement. Small businesses under the guidance of their accountants save enormous amount of money. Accountants also save small businesses money in the form of avoided legal and reputational cost by way of offering advice as it relates to compliance and regulatory matters.
You will at this point agree with me that the roles of accountants in American small business is now pervasive in nature and any small business that fail to appreciate the value that qualified accountants can add to their business is destined to have difficulty grasping with the challenges of today’s ever challenging and yet rewarding business landscape.