Accounts are an entrepreneur’s key tool. Every company should keep accounts, and in many cases they are mandatory. The accounting obligation and requirements, and the publication of financial statements, depend on the type and size of a company.
Publication of financial statements is non-mandatory in the case of small business activities by a private trader, general partnership or limited partnership. A private trader’s financial statements can be single or double entry. Those of a general or limited partnership must be double entry. Limited liability companies must keep double-entry accounts and publish their financial statements.
Double-entry accounting
Double-entry or accrual accounting provides comprehensive information on a company’s financial situation. Double-entry accounting provides clear information on a company’s capital, liabilities and assets.
Data from double-entry accounts makes it easier to plan a company’s future, business activities and finances. It can be used in budgets, forecasts, profitability calculations and cash flow statements.
Bookkeeping
A company has incoming and outgoing payments as it sells and buys goods and services. Such payments in and out are known as business transactions, which produce receipts describing the transaction’s content. An accountant makes entries in the accounts based on information on receipts. At the end of each accounting period, the accountant draws up the company’s financial statements with at least an income statement and balance sheet, and the required attachments (depending on the company). The company’s income tax return is also based on the financial statements.
Your accountant is the key partner of your company
A good accountant is one of the most important partners your company can have. You should hire an accountant when you start your company. They will help you with your company’s finances, leaving you to focus on your business. Accountants provide valuable financial information in support of decision-making. They will use their skills to help your company move forward and succeed. You need to be aware of your company’s financial situation, so set aside time to track its financial performance or go through the figures with an accountant.
How to find a good accountant
It’s worth putting time and effort into looking for and choosing an accountant. They can often be found through networks and recommendations. A good approach is to ask other entrepreneurs about their experiences: for example, Facebook Groups in your sector may provide tips on good accountants.
Your accountant should understand your sector, so as to provide your company with more added value. If an accountant in Finland has a ‘KTL’ degree, this indicates a business studies background and several years of work experience in financial management roles.
ven more important that they are professionally skilled, precise and available when you need their skills. You must secure bookkeeping competencies for your company. A good accountant will provide advice on matters such as how your company should handle taxation before the accounting period ends. Try to engage in proactive dialogue with your accountant from the start. Regular contact will ensure that both parties know where they are going, and secure your accountant’s skills for your company.