Relationship Analysis Between Accounting Firms And Companies
The current situation of SMEs
SMEs past decades were not the same as today. In fact, small businesses are well advanced in recent years and their managers with them. He long ago, small businesses composed of two or three employees who mastered a specific art, they were artisans! Over time, business owners have moved from craftsmen to managers.
It is the evolution of Western culture, the available training and access to higher education which has enabled a large majority to know in depth the bottom of their craft and developing thereby different notions of Business Management. Today and in our capitalist economy, these particular concepts are almost essential to the survival of a company (in terms of profitability). Indeed, in a competitive environment as the Western market, will sell without profit margin or produce goods without knowing the concepts related to production costs is not imaginable.
Therefore, companies now have a better monitoring of all types and costs of all transactions in the company. Several companies are equipped with specific managements software to the corporate sectors and accounting software containing functionalities and application controls facilitating accounting and preventing accounting errors. It can be said that several companies are virtually autonomous in terms of accounting.
Consequently, one may question the usefulness of accounting firms.
The relationship between Accounting Firms and Companies
Basically, the first of an accounting function is to record the transactions in the company and to regularize the accounts at year end. In 2013, we can see that many accounting firms offer the same services to companies that are 10, 20 or 30 years. Companies have therefore advanced level of management, some accounting firms offer a variety of additional services to accounting, while others have absolutely nothing changed in recent decades.
These firms would not change in the role and the services they offer to the customer. In recent years, all operations performed by accountants before can be easily entered into an accounting software that does not require a deep understanding and expertise of accounting standards to operate properly. The process is often the same: the company between the accounting data in its accounting software during the year and transfers these to the accounting firm that will incorporate into its own accounting software and will verify the financial statements.
Yet the basic accounting entry is not interesting for accounting firms, both in financial terms and as regards the development and motivation of employees. These mandates are the valuable time that could be used to service advisory mandates and mobilize much labor and time.
Many accounting firms have realized that they must diversify to meet the growing needs of businesses. Yet other firms must realize that they not only ensure traditional role of accounting but also tax consultants, social and legal. The accounting firm should develop a relationship and a deep understanding of the financial statements and the current situation of its customers.
A firm offering advanced services tax is interesting, both for the firm itself as the client. Indeed, tax laws become more complex over the years and it is impossible for the customer to control all under the law. He must deal with an accounting firm that provides industry professionals with a master’s in taxation. The firm allows to save a lot of costs to the company and a mutual and beneficial relationship develops over the years.
It is therefore essential that some accountants understand that their customers are not incompetent accounting and are rather savvy managers. The customer, he has to ask for more from his accounting firm to a beneficial relationship develops.