Why It Makes (Dollars and) Sense to Hire an Accountant to Do More Than Just Prepare Your Tax Return (continued from yesterday)

By Gary Krupa, CPA



It also helps to understand what prevents many small organizations from achieving their potential, to understand the full value of an accountant to an organization.

First, because many owners and directors are preoccupied with increasing revenues or managing their staffs, they neglect to make detailed plans for their financial success. “Be Prepared” is the Boy Scout motto, and it applies equally to business planning. Such a plan requires making informed decisions based on knowledge of market conditions, the organization’s recent financial history, and the organization’s financial goals.

One of the tools used by accountants to develop a financial plan is a projection. This is an estimate or set of prospective financial statements prepared using one or more assumptions. A similar tool is the forecast, which presents the entity’s expected financial position, results of operations, and cash flows.

These reports, in addition to financial statements prepared on a historical basis, help not only with decision-making, but also when applying for outside financing, such as with a bank loan. They help the organization’s management know what to expect well in advance of important developments, whether positive or negative. The management is then better prepared to take effective action to increase revenue, reduce costs, reduce taxes, or avoid costly financial setbacks.

Tomorrow's entry: The Budget: Setting realistic goals and achieving them with the help of an accountant.

Gary Krupa is a CPA in New York and Arizona, with more than twenty-five years experience providing accounting, tax, audit and computer services to small and medium-size organizations. He’s especially attentive to the needs of his clients. He moved to Rimrock, Arizona in late May 2008. He has offices in Rimrock and Peoria, AZ. His e-mail address is gkcpa@q.com.
Read more about Gary Krupa's accounting service by following this link:

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