This is the first in a series of articles exploring XBRL. Our next article will consider how XBRL was developed and the wider advantages and disadvantages of XBRL as a financial reporting tool
10 November was the day when accountants around the world were honoured for the invaluable role they play in the world of business. Their work helps businesses to thrive, it supports the economy, and enables people to navigate the complexities of finance. Gary Epstein, MD of EasyBiz Technologies, discusses the importance of the field of accounting and the professionals who dedicate themselves to the task.
Accounting is vital to a business’ success, as it helps the owners, managers, investors and other stakeholders evaluate the financial performance and position of the business, which is why it’s important to acknowledge the work they do. Accounting also provides vital information regarding cost and earnings, profit and loss, liabilities and assets for decision-making, planning and controlling processes within a business.
Also important is that SARS requires businesses to keep financial records for tax purposes. In addition, as regulations and laws are regularly changed, accountants will always keep up to date with them.
Accountants play an invaluable role in supporting small businesses in their endeavours to adapt and survive. An asset to any business, accountants are pivotal in creating and driving the strategic direction of the business as well as analysing, creating and communicating financial information.
Even if a business owner feels they have a good handle on the financial paperwork, or have accounting software in place, it still takes time to calculate and file their financial information. With an accountant to take care of it, they have more time to focus on other aspects of the business.
Well-kept books can mean the difference between financial success and disaster for any company. An accountant will make sure all financial information is visible, organised and accessible. This provides the foundation for better data analysis to forecast income, prepare for losses, and plan strategically for the future.
Accountants are a vital source of information and advice for making critical business decisions on a weekly, and even daily, basis. As they are somewhat removed from the day-to-day running of the business, they can offer a new perspective based on the bigger picture, giving guidance on applying for business loans, providing solutions to problems, or even offering new business ideas.
A seasoned accountant will have worked with a broad range of companies and will have a good idea of the best practices that worked for similar companies, as well as what didn’t work. This sort of insight is priceless.
Another example of where accountants have really proved their mettle is during the pandemic. Many businesses endured gruelling challenges, and accountants stepped up to ensure that companies stayed afloat – and even grew in many cases. Working remotely became a reality, so accountants and businesses had to adapt to using new technology. Cybersecurity expanded rapidly, which affected financial record-keeping and accountants had to adapt and ensure business continuity.
On a broader scale, accountants underpin global sustainability. Without them, capital markets would become like the Wild West, with no rules. Accountants also evaluate a business’ non-financial position, advising on environmental, social and governance issues. They also have the skills to not only measure the non-financial impact of economic activity, but also to guide individuals, businesses and governments towards making better decisions. They also support the country’s economy and global financial sustainability. Advising business-owners and governments are essential functions of an accountant, which is why it’s important to acknowledge their invaluable contribution this International Accounting Day.