If any business has to thrive, accurate and detailed accounting is essential. Nevertheless, there are several false beliefs and stereotypes attached to accounting that need to be addressed. It is important to eradicate these myths so that companies have a clear idea of how accounting can help them flourish in their business. In this article, we will talk about the common myths and facts related to accounting.

Myth #1: Accounting is only about crunching numbers

Fact: Accounting in the current age involves a lot more than just crunching numbers. Nowadays, accountants give business advice, and they can advice business strategies for your company. Also, with the advent of advanced technology, accountants nowadays have started using innovative technologies to offer insights to companies.

For instance, an accountant can predict the expenses and income of your company in the future, which can assist your company in handling your cash flow. By using these predictions, you can ensure that your organization has adequate liquidity to comply with its business requirements. An accountant can also plan the budget for your company so that it is in compliance with the goals of your company. The accountant can suggest certain methods to minimize costs and obtain maximum profits. Furthermore, imagine the situation when a company decides to make an investment. The accountant can offer advice on whether the investment is feasible or not from a financial perspective.

Myth #2: Accountants can be replaced by software

Fact: Accounting is not a skill that can be easily replaced by artificial intelligence and advanced software. Professional accountants have a lot of expertise, analytical skills, and strategical thinking skills, which a software cannot provide. For accounting work in businesses, software can be used to perform routine tasks, while accountants can focus their skills on tougher tasks like devising strategies, performing analysis, and making decisions.

Nowadays, complicated mathematical calculations are being handled by accounting software, and hence, an accountant’s job involves more analysis and less math-related work.

Myth #3: Accounting involves only maths

Fact: This is a common misconception among people. It is presumed that accountants only have to do math, which is absolutely not true. Accounting requires a detailed and meticulous understanding of financial data, as well as analysis of the data. It further involves taking strategic decisions based on the interpretation of the data. For example, an accountant can collect the financial statement of a company and compare the financial information at different periods to detect any trends, such as growth in revenue. Accountants also perform risk assessments, i.e., they evaluate the financial risks involved in the operations of the business or the investment made by the company.

Myth #4: Small-scale businesses don’t require accountants

Fact: If you own a small-scale business and assume that you don’t require an accountant, you are wrong. If you want your business to grow and flourish financially, taking the help of a professional accountant is necessary. Hiring an accountant will increase your company’s profitability. Accountants also help in saving costs by optimizing the financial processes in your company and identifying any discrepancies. For instance, when an accountant reviews the expenses of a company, they can identify any unnecessary cost, such as a subscription that has not been used or office supplies that are in excess. An accountant can also help in reducing the taxes paid by the company while still satisfying the requirements of the company.

Myth #5: Accountants only perform tax filing

Fact: A prevailing myth about accounting is that the important work in accounting is limited to filing of taxes and traditional bookkeeping. In tax accounting, the accountants prepare and file tax returns prior to deadlines, and the tax accountants ensure that the company fulfills the obligations set by the tax laws. However, all accountants do not possess expertise in filing taxes. Instead, they may exhibit skills in some other areas. For example, an investment accountant works with an asset management company and offers services in financial management and consulting. They process investments, monitor the activities of third parties, and provide consulting related to finances. On the other hand, a project accountant works on a company’s project and monitors the accounting and financial activities related to the project. An accountant analyzes and interprets reports for the formulation of financial statements. They then advice to businesses based on the analyses and interpretations. They would also detect financial discrepancies in the project accounts.

Conclusion: Accounting is highly significant for any business or organization

In conclusion, it can be said that the myths related to accounting need to be busted so that companies can use the skills of accountants in order to succeed financially and otherwise. The field of accounting has evolved a lot over the past years and is currently in an exciting phase. More and more companies are realizing the importance of hiring an efficient accountant. Needless to say, no business, whether small or large, can function without the assistance of an accountant.