What do we know about accountants, in addition to the fact that these are people who deal with debit, credit, and tax reporting every day? Accountants play an important role in every kind of business. However, accounting always contributes to the development of myths and misconceptions as many people don’t understand how it works. You can check this service for tax and accounting.
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In this article, we gathered five debunked myths about accountants you should stop believing in.
1. An accountant is a calculator
There is not even the slightest shade of truth in this statement. If you want to receive money, you must calculate the amount that you have earned, take into account the difference in exchange rates when exchanging currencies, estimate your commission in percent, etc.
Accounting looks like puzzles. When you look at all these numbers, you are searching for the right place for them. You should use these numbers to tell the business owner, bank, or manager what they mean, what to do with them, and what to expect from them in the future. At the same time, you can tell what will happen if the puzzles are gathered in a different order.
2. An accountant is a tax agent
You should understand that your tax reports should be arranged in strict accordance with the law by specialists trained in tax law (not an accountant). A true accountant is one who has studied accounting specifically. Many accountants make tax reports because they are forced to do it, but accounting and tax accounting are different. If your accountant is able to perform both of these accounts, you should be proud of him or her.
3. Small businesses don’t need an accountant
Any business needs an accountant. A business can’t and shouldn’t be abandoned whether you have money or not. Otherwise, how are you going to find out at the end of the year if you have profit or loss, which you need to report to the state revenue service? After all, you need to show such a profit the tax with which you are able to pay or you are simply deceiving yourself.
Your accountant will accompany you throughout the financial year, so when it comes time to pay taxes, your accounting will be neat, clean, and understandable. In addition, your accountant will be able to give you monthly financial statements. They will tell you what you should improve, help you make financial decisions, and suggest when your business will tend to lower or higher income.
4. I don’t need accounting reports to know how my business is progressing
If you work a lot, this doesn’t mean that your business is going well. You need reports to understand whether the prices of your goods or services are appropriate. You need reports to see profitable areas and problem areas. If the report shows that you have sources of losses in the production process, you need to come up with a solution to the problem and reduce losses.
In the service industry, reports can also show how time is used. If time is used inefficiently, income is lost as well. Reports can help you identify a problem area and redistribute the responsibilities of employees. You can also optimize activities in such a way that they will quickly and efficiently make a profit for your company.
5. I can handle my accounting myself because I have an iPad
The iPad is an amazing gadget but that doesn’t mean that it can replace an accountant. Most accountants work on special software, which you may not know about. You can be a wonderful businessman but if you don’t know thoroughly how to work with the accounting side of your business, you need to get good advice from an accountant about the secrets of this process.
Accounting software is specific and if you don’t understand accounting by entering numbers in the program, you can create even more confusion. In case you don’t enter your assets correctly and don’t depreciate them, you will lose expenses in the balance sheet that can reduce income tax. Moreover, if you don’t show the correct profit (as well as the tax) you can get certain problems with the law.