Posts Tagged ‘accountancy firms’
Your business keeps running on your finances. Having the capacity to track and examine your income and expenses is critical for the survival and health of a business. Accountants likewise help you with your financial forecasting and also cash management through their advice in the wake of doing an internal audit.
Getting to know how your financial health for your business is an essential information and data that must be constantly updated. Each business industry may have different operating styles and the need for cash may be done differently. For example, in the construction business, while the contracts are of big amounts, there are a lot of expenses especially when it comes to construction materials. Construction companies may think they are making a lot of money with the amounts of cash coming in but when the suppliers start handing you the bills for the stuff you purchased from them, the cash going out may even be faster than going. In that sense, the need for good financial forecasting is a prerequisite. In some cases for even bigger contracts, the contract itself may be used as collateral for construction companies to borrow money from banks as part of the operating capital needed for the project.
An accountant can help the construction company make a forecast on how much money needs to be sourced from the banks. It is to the interest of the construction company that the less money they need to borrow from the banks, the better as the interest does eat up on the profits. Accountants can also save money for such companies by properly applying the specific expenses to areas that is tax deductible. Sometimes what you consider as a meeting with a potential client is an expense cost which is properly placed helps your bottom line in the end.
Some companies have internal accountants and external accountants. The internal accountants actually take care of the internal operating expenses and earnings of the company and do the financial forecasting and even help in doing the paperwork for any loans to be made. An external accountant deals with the local and other taxes that need to be paid. Some local companies may have one accountant doing both jobs. What is important to note is that companies have to be transparent with accountants so they get the real picture of how your company is and make the appropriate recommendations.