An Overview of Large Spectrum of Activities
Performed by Accounting Firms to Make a Business Successful
Accounting firms need to perform several different tasks related to proper functioning of any business entity. Our aim here will be to look into these tasks and how accountants can be useful in proper implementation of those tasks.
An Insight into Large Spectrum of Activities Performed by Accounting Firms
An accounting firm is responsible for carrying out many different tasks, let us examine some of the tasks they are required to perform.
Sale of Your Business
There are several aspects to be taken care of at the time of sale of a business so that after tax returns you are able to get can be maximized. Accountants also need to examine and determine tax effective options which are open for you at the time of sale of your business. Some of the other tasks which are performed include:
- An accounting firm conducts proper analysis of corporate structure of your business.
- Formulates sale transaction to comply with tax planning for maximizing returns.
- Performs liaison with legal authorities and review legal documents of your business.
- Helps you during negotiation on terms of business sale and work closely with business valuators.
- Reduces tax obligations by inclusion of specific international strategies.
- Suggests other approaches like employee funded purchases, earnouts, leaseback transactions and share for share exchanges.
Purchase of Business
If you are interested in purchasing a business you need to consider many different things. Your accountant has to perform tax evaluation as well as decide whether to buy shares or assets and the best way of structuring financing of the purchase. Your accounting firm will have to examine past tax filings of the business you plan to purchase and provide you with a detailed report of the findings. Other important aspects which are looked into at the time of purchase of any business consist of:
- Conduct needed tax planning for matching profits from business with losses occurring on other sources.
- Accountants also work with your legal counsel for managing required legal documents and taxation details.
Employee Share Ownership Programs (ESOP)
Accounting firm can also work on designing as well as implementation of ESOP which can consist of allocating a certain share position to key executives or total buyout of your firm by employees.
Accountants can help in appropriate designing of employee share ownership program as well as create valuation reports as per requirement. They can also suggest legal counsel with necessary experience in procedure for implementation of ESOP. Role played by an accountant is quite valuable since the accountant provide objective as well as unbiased advice and individual counseling to employees about the investment they would be making in the company. Accounting firm is also responsible for preparing tax commentary that accompanies share offering. This tax commentary tries to provide a summary of the transaction in very simple terms and offer appropriate answers to some of the common questions employees may have about ESOP.
Thus, to conclude we can say that an accounting firm has an important role to play in business success and in proper management of all aspects of running a business.