A business cannot function at its optimum performance level without an accountant. Some business owners believe that anyone who doesn’t make or sell a product is not necessary to have. Nothing could be farther away from reality than the accountant.
An accountant is educated in the principles of accounting and financial reporting which means he can establish business records which account for the revenues and what the business does with the revenues. The Income and Expense statement is a vital record of the revenues and the expenses. On a monthly basis, this statement shows the owner how the revenues are being spent and where the money is coming from.
The accountant can make a cash flow analysis for every month for six months based on the data in the Income and Expense statement. This will help the owner plan to reduce inventory purchases or find a way to increase sales if the cash forecast looks bleak.
The Accountant in Manhattan can make an analysis of inventory turnover which will help the owner decide if he is spending too much on inventory. There are several similar ratios the accountant can make which will help the owner do a better job of planning.
The Profit and Loss statement can be made by the accountant and it will accurately reflect the financial status of the business. The Balance Sheet is another document that the accountant can prepare to show the owner the financial position his business is in.
Perhaps the Accountant in Manhattan becomes most valuable at income tax time. Since he has set up the books, he will be able to extract every tax deduction and credit. He will also know the amount of income which is taxable. The IRS code is 80,000 pages, but an accountant is trained to know which pages apply to the business. The tax filing will be accurate and it will be filed on time. Also, the quarterly payroll taxes will be filed on time.
An accountant can help the owner manage his business through better long range planning and the correct recording of income and expenses. He can look at the data in the books and immediately raise a flag if he spots a problem whereas the owner may not find out until it is too late.
