“CHOOSING A FINANCIAL PROGRAM, FORECAST THE COMPANY’S DEVELOPMENT FOR 5 YEARS”
Often, at the stage of company formation, accounting is perceived not as an independent important process for a business, but only serving others. But poor accounting practices can expose a business to a number of risks.
How to identify financial risks in a timely manner and overcome them, our editorial board was told by Maria Galelyuka, head of MASTER: Accounting.
What financial accounting risks may a company have?
Errors in entering or processing data. For example, the accountant forgot to reflect the release of materials from the warehouse into production or made a mistake in the amount. As a result, production costs are underestimated, the company runs the risk of delivering an underestimated price.
In addition, profits can be artificially inflated, which means that the company will pay more taxes than it should. And with dividends, confusion can occur: they will be paid out of non-existent profit.
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Errors in making payments. For example, an accounting officer accidentally paid the same bill twice or made a mistake in the payment amount with the number of zeros. You can contact the counterparty and ask to return the erroneously transferred money.
But it will take time, and may cause inconvenience to the recipient of “extra” money. Such procedures involve the need to accrue interest and even taxes. If the company has a large number of payments, the error may go unnoticed at all.
Untimely submission of reports to the tax or its absence. Often, accountants for various reasons do not submit reports to the regulatory authorities on time and do not inform management.
Many months after the dismissal of this accountant, managers discover that the company did not submit social security reports, or that it was deprived of VAT status.
Maria Galeluka, “MASTER: Accounting” – about what are the risks of financial accounting for business and how to overcome them. 0
The consequences for the business can be either insignificant in the form of an administrative fine or catastrophic: a huge amount of a tax credit unreasonably used will have to be returned to the budget.
Tax evasion. A simple example: a company has discovered that it owes a substantial amount of repatriation tax to the budget. Among the company’s operations was the export of services, but neither the accountant nor the manager knew that some operations were taxed differently.
The company paid all “regular” taxes on time, but accidentally discovered that it was necessary to pay another one.
Lack of all necessary primary documents. Another practical example: a company sold goods to customers on a deferred payment basis. However, not all customers returned a copy of the invoice with their signature and seal.
Nobody wanted to specifically collect documents. When one of the customers did not pay for the goods, the company filed a lawsuit, but without supporting documents it was not accepted for consideration, and the company suffered losses.
Is it possible to avoid the risks of financial planning and accounting?
To minimize risks, you will need:
– qualified staff or a reliable financial accounting outsourcing partner
– fully functioning system of internal control and internal audit
– modern software customized and adapted to the needs and characteristics of your business
– systematically organized financial accounting business processes
– the correct process for transferring cases in case of a change of key employees
– regular audits
What to do with risks that cannot be avoided? They cannot be completely reduced to zero while the work is done by people, not programs. But if you take all the necessary steps to minimize and risk management, you will not have problems.
When do I need to implement software for financial accounting?
Financial accounting software is necessary for all companies operating under the general taxation system.
Financial accounting under such a system will be quite complex and multidimensional even for small companies with simple activities.
For companies operating on a simplified taxation system, most of the financial information for calculating taxes is not required, but it can be useful to entrepreneurs themselves.
Software for financial accounting may need:
– for payroll and payroll taxes
– for the quantitative and financial accounting of inventories and their movement
– to streamline settlements with suppliers and customers
In what situations is financial risk management and financial accounting outsourcing?
The transition to outsourcing accounting procedures depends on the characteristics of the company.
Specialized accounting companies give small and medium-sized businesses the opportunity to receive the services of more qualified specialists compared to those that they could hire in the state for the same money.