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Accounting is a crucial component of any business, large or small. Collier (2015) states that accounting is “integral to the formulation and implementation of the strategy” (p. 23). Indeed, accountants can collect and analyze financial information that is valuable for business decisions and may act as financial advisors in times of need. Moreover, accounting information is also important to identify any organizational issues during internal audits. In this paper, I will discuss how accounting information and an accountant could help my future company.
Accounting information includes data regarding the organization’s costs, taxes, operations, and finances. Each type of accounting information can help my future business differently. For example, operating information includes data on employee wages, stock, operation expenses for each department, and more. Such information is especially useful if the organization has to cut down its costs, as it can be used to identify the items that are not cost-effective. Financial reporting, on the other hand, reflects the company’s assets, debts payable, revenues, and other components of financial status.
This type of accounting information can be used to attract investors and prospective shareholders (Collier, 2015). Certain companies also use annual financial reports to enhance their reputation and promote transparency, although this is more applicable to large companies and corporations. Analysis of the company’s costs, on the other hand, is crucial to the budgeting process (Collier, 2015). For example, if the company is considering to launch an extensive advertising campaign, a cost and revenue analysis can help to identify the acceptable budget that can be spent on advertising to avoid the loss of profits. Overall, accounting information can assist in the decision-making process. Moreover, accounting reports and data could help me in creating a business strategy that would ensure higher sales and revenues.
The Accountant’s Role
In the medium to large companies, all accounting procedures are usually concentrated within a separate department (Collier, 2015). However, at the beginning stages of business development, I may choose to hire just one accountant. First of all, this would help me to save on the salary: although the leading accountant would be paid more than a regular accountant, it would still be cheaper to have one worker performing the accounting functions. Secondly, opting for one accountant instead of a full department is appropriate to the business of small size; as my company develops, the finances and operations will become more complicated, requiring more employees to share the workload.
As the accounting department is formed, the first accountant can become its manager or leader, as he or she will have extensive knowledge of the company and its operations. From the very first stages of business development, the accountant would play a major role in my company. To ensure that the company survives and is profitable, it is crucial to review accounting information on costs and operations while making business decisions. Moreover, as his or her knowledge of the organization grows, the accountant can help in the process of strategy making by offering creative ways of cutting costs or attracting investors.
Overall, I believe that accountants and accounting information are essential for companies of all types and sizes. Accounting can help in planning the budget, reducing the costs, attracting prospective investors, and building the company’s reputation. Thus, the accountant becomes one of the most important employees and the information and advice provided by the accountants should be considered in decision and strategy-making.
Collier, P. M. (2015). Accounting for managers: Interpreting accounting information for decision making (5th ed.). Hoboken, NJ: John Wiley & Sons.