Taxing Times: Why SMEs Need an Accountant?

The SMEs (The Small and medium-sized enterprises) Or the SMBs (The Small and Medium-sized Business) are independent firms or independent business. In SMEs, the number of employees is employed fewer than the given number of employees. This number varies across over the other countries. In the European Union, the upper limit designating of an SME is about 250 employees. However, some countries set the limit to 200 employees. While in the United States its considered that SMEs should include firms with fewer than 500 employees.

 Why SMEs Needs an Accountant?

To Keep the Financial Records

  • To prepare Financial Statement, balance sheet, profit and loss account, cash flow statement are the key elements for reporting to the investors/ financiers/bankers. For providing the important information about the financial status of the enterprises to the shareholders the company needs an accountant. To prepare these important financial statements the company needs books of account and to prepare that you need an Accountant in the SMEs.

For Better Financial Management

  • The SMEs should have an accountant to make forecasting of financial requirement, acquiring necessary capital and to analyze investment decisions easy to manage. Therefore the Business should have adequate records of all the business transactions. While keeping books of account, the transactions should be recorded according to applicable accounting standards and principles which are currently going on in the economy, because these principles/standards make sure the accuracy and all requirements of the industries and law.

For Recording every Transaction

  • Every business transaction that takes place in the company whether it is a purchase or sale, the expenses or income, payment or receipt should be recorded in the books or in the accounting system on a regular basis. The recording of every transaction whether it says about all the expenses that are made in the accounting year. However, preparing the adequate and complete books of account is important for a business firm.

For Documentation

  • There are business transactions that require documents for each transaction that describes the business expenses to the owners. These transactions can be like sales invoice, a supplier invoice, a supplier payment, bank payments, and journals. However, the documents provided for the audit are the pieces of evidence for each transaction and are an important part of maintaining accurate records in the event of an audit which only the accountant can make. So it is important to have an accountant in a SMEs.

To know more about documentation in  any type of business visit | companies documentation | MCA

For Price Fixation

  •  At what price he should sell his product or service? Price fixation is the biggest issue for the small businessmen. Price of most of the products has fixed on the cost plus margin basis. To ascertain the cost of a product, So the owners should have proper records of cost elements of the product. Hence, the business that does not have books of account is like a blindfolded driver who can easily cause an accident which may lead to consequences. For these Price Fixation suggestion, SMEs to need accountants.

For Fulfilling Tax Obligations

  • If anyone wants to do business, they have to pay taxes. Taxes like income tax, sales tax, excise duty, service tax, central sales tax etc. To know the correct amount of tax obligation and to settle the business/legal litigations, The SMEs should have adequate and accurate books of account. For these type of work, the accountant is important in every SMEs.

Conclusion

As the points mentioned above suggest that every Small – medium enterprise should have an account for making the things go according to the planned procedure. Having an accountant will definitely make the task easy and also helps in the legal formality of the firm.

To know more about how taxes affect other business structures visit |Tax ImplicationImpanix

By | 2018-07-02T15:17:31+00:00 July 2nd, 2018|need of accountant, SMEs taxation|Comments Off on Taxing Times: Why SMEs Need an Accountant?

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