8 Truths to Understand on What Accountants Do and Do Not Do

Accountants are the unsung heroes of the business world. A good accountant can do a lot to help the finances of a company or an individual, but they can’t do everything. That means that it is important for everyone who is thinking about hiring an accountant to have a clear understanding of what an accountant can and cannot do before they make any hiring decisions.

Do: Guide New Businesses

New businesses are built on a good idea, but they also need to understand their financial situation in order to thrive. Accountants can look at a company’s records and understand if it is spending too much money, or if it has more room to invest. That can prevent new business owners from making damaging financial mistakes or passing up opportunities to grow.

Don’t: Plan Ventures

Accountants need to understand finances and business to do their jobs, but that doesn’t mean that they are all experts in planning new business ventures. While they do provide valuable insight into the financial aspects of a business, they tend to lack experience in marketing and production. Those skills are also necessary for most new businesses. That means that while accountants are vital for new businesses, they can’t handle all of the planning on their own.

Do: Plan Financial Goals

Everyone can benefit from having clear financial goals. Most people have trouble coming up with them beyond a vague outline because most people don’t have much experience dealing with finances. Accountants understand how to take the goals that people understand and convert them into clear financial objectives, such as reaching a certain income level or saving the right amount of money every month. They can also tell people which goals are realistic and which ones are not in the short term, which can be vital for people who are recovering from a bad financial situation.

Don’t: Work with Everyone

Accountants often specialize in a single type of business or industry. That tends to be necessary because each industry has its own financial quirks and regulations. An accountant needs to understand those things in order to do a good job, but it’s impossible to understand them all for every industry. They solve that problem by specializing in a specific field.

Do: Manage Debt

Most accountants have a lot of experience with people and organizations that are in debt. They understand that debt isn’t an inherently bad thing in the long run, but that people do need to have a plan to pay off their loans. People who need help forming that plan can usually get it from an accountant, who will take their income and expenses into account when coming up with a solution to their financial challenges.

Don’t: Make Debt Disappear

Accountants understand debt, but while they can help a person plan a way to pay it off, they cannot simply make the debt disappear. They certainly do play a role in bankruptcy proceedings, but getting rid of a debt requires either paying it off or occasionally taking legal action with help from a specialist. Ultimately, an accountant can only show their clients a path that they can take to get rid of the debt, but the client must walk that path on their own.

Do: Handle Invoices

Invoices are the documents that a seller sends to a purchaser to claim payment for the sale. Even a small business can accumulate a huge number of invoices very quickly, and somebody needs to sort through them all to make sure that the money goes to the right place. Most accountants know how to do that as quickly and efficiently as possible. Hiring one is a great way to get the work done at a reasonable pace and be sure that no bills are going unpaid.

Don’t: Collect Debts

Accountants can sort through invoices to find out which ones are unpaid, which does create a list of clients that owe money to a business. They can also make contact with the debtors to try and get payment, but they don’t have the authority to press the issue. If the client refuses to pay, it becomes a job for lawyers and law enforcement rather than the accountant.

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About the author: Wifred Murray

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