Running a business is a stressful, full-time job. The business owner is responsible for every aspect of the business and must be sure that those hired to help are competent professionals. This is especially true when it comes to the financial part of the business.
Dangers of an Incompetent Accountant
When you hire an accountant, you need to be able to trust that person to provide you with excellent service and sound advice. When the accountant fails to do so, there can be damaging and lasting consequences such as these:
Major Tax Problems:
An accountant is generally responsible for handling payroll and business taxes. If the payroll taxes are not figured and distributed properly it affects employee wages. This can cause the employees to become disgruntled and tension and difficulties can arise. If there are errors made when paying the business taxes, especially if the mistakes slip by for a several years, the business owner could end up paying hefty penalties. Tax inconsistencies may also cause the business to become a target for audits, which can be very time-consuming and stressful.
Loss of Creditability:
Another important job usually held by an accountant is accounts payable and accounts receivable. If mistakes are made in these areas, it can affect relationships between the business and its suppliers and other organizations to which money is due. If payments to creditors are late or mismanaged, the business may suffer loss of creditability. Bank loans may be hard or impossible to obtain in the future, and some suppliers may stop shipments or discontinue doing business with the company.
Mismanagement of Company Funds:
For any business to survive, it must stay on a budget and make a profit. In order to know if the business is on track, all financial reports must be accurate and up-to-date. An accountant must know and be able to communicate to the business owner or stockholders, the financial status of the business, at any given time. If the accountant gives the wrong information, funds can be spent that were actually unavailable or projects can be started that should be held back. Left unchecked, these kinds of mistakes can eventually cause the business to close altogether.
Hiring a competent accountant is crucial for the success of your business. Don’t trust your business to just anyone, call the professionals at Kalil and Associates who have the experience and expertise to handle all your bookkeeping and accounting needs. Contact Kalil and Associates today to see how they can help your business!