Every single business venture, be it small, medium or large, depends to a great extent on capital. As proper financing and positive cash flow are the cores of a smoothly-functioning enterprise, keeping a tab on it is, unsurprisingly, the next obvious step.
Accounting is essentially bookkeeping, recording, and analysing all aspects of finances, irrespective of how it is related to a business venture. It includes an account of profits, losses, capital invested, balance sheets, book-keeping and eventual tax receipts, among other issues.
Consequently, chartered accountants form the essential backbone of every business enterprise in and around the metropolis, aiding in their proper functioning. It brings to the fore the role of accountants in modern business.
Functioning of accountants
Accountants practically have dual functionality for all businesses concerned. On one hand, they are bookkeepers of all the liquidity involved in running a business. On the other, they safeguard the interest of business enterprises by keeping accounting documentation updated as per legal requirements.
Irrespective of whether considering accountants for self-employed in London or for bigger enterprises around the city, it is important to understand what to expect from accountants and accounting departments. The roles and functioning of this department emphasise why it is so intrinsic to the business setup in the modern world.
- Financial accounting: The primary function of an accountant and/or an accountancy firm is to keep a tab of capital inflow and outflow in a specific business. Essentially, accountants must be adept at working through the financial details and structure the accounts in a way that meets the government’s regulatory standards.
- Management accounting: It is a crucial role of chartered accountants to analyse financial data and use it for improved day-to-day functioning of a business organisation.
- Budgeting: Be it accountants for start-ups or established business organisations, budgeting is imperative for smooth functions. Usually, established businesses go for annual budgeting, while it can be half-yearly or quarterly for smaller organisations.
- Payroll management: Handling all the account transfers while settling salaries is another role of chartered accountants in case there is no designated payroll manager.
- Taxation: Functions like tax submissions along with filing for returns fall under the accountancy department. From government directives to company decisions, everything has an impact on the tax paid as well as the returns filed. Accountants for small businesses as well as bigger ventures, compile these data and accordingly comply with tax-related requirements.
- Financial systems: Under the financial systems, the role of an accountant is to formulate accounting necessities for an enterprise. Essentially, they read the financial tone and structure these accordingly.
- Aiding business strategy: Accountancy department also aids in the formulation of general business strategy via superior monitoring of everything related to accounts and finance.
Essentially, accountants are the custodians of all capital-based activities in a specific business enterprise. London being the beacon of business east of Greenwich, accountants in East London are the rightful custodians of all capital flow across different businesses and companies and have very difficult tasks to perform.
Understandably, business organisations must be clear on the role of accountants themselves so that they can look for the same while choosing a professional accountancy firm.