Small businesses that have hired accounting firms to manage and prepare their year-end financial statement must be aware of the upcoming 2021 changes. These changes will directly impact the accounting activity within the firm. Although these changes are suggested to prepare flawless year-end financial reports.
The new changes will be applicable from December 2021. The updated Notice to Reader financial statements may be referred to as Compilation Engagements. Before highlighting the main features, it is important for all small business owners who have not yet hired a professional accountant to manage their business accounts, to consult the best accounting firm in town. Those businesses which do not have any affiliation with experienced professionals might suffer while handling official audits and reviews. To make all accounting and bookkeeping processes easy, it is best to hire professional bookkeeping services.
What is in the New Changes?
The new changes are made to prepare error-free financial reports that can be trusted and used by the third-parties. There will be some added sections in your year-end financial report prepared by your hired accountant. You will also have to provide more relevant and accurate information to your accountant to report for each transaction. This will help them get a better idea about your business operation and current position. Doing so will give investors a sense of confidence that the mentioned numbers are all correct.
Moreover, this will also standardize the accounting process for all small business accountants. Sometimes it is possible that your hired accountant might not be reviewing your books properly. He might be lacking the efficiency to reconcile all business accounts. To make sure, that all your accountants are working properly and following the best procedures to compile and review the yearly financial statements, these changes are suggested. This might increase some workload for your accountants as well. You might have to pay some extra amounts to satisfy your accountant’s needs. But in the end, you will be on the safe end.
How Businesses Will Be Affected?
First of all, as a small business owner, you should be satisfied with these upcoming changes. However, those small business owners who have not hired a professional bookkeeper should immediately look for online bookkeeping services. Most businesses do not opt for experienced accountants or dedicated bookkeepers due to limited resources. But with time, accounting services have transformed. Now you can hire an online bookkeeper and consult your accountant online without having to meet him physically. This will assist you to save your time, money and resources. It will also provide you with online software to check your daily books, keep track of your bank accounts and record each transaction. Thus, hiring a virtual bookkeeper or an online accountant should be your priority. After that, you will need to discuss the latest changes.
These new changes will be applicable from December 2021. Your accountant will update you beforehand, if not then you should set a meeting to discuss these changes in detail. These changes will change the course of work and increase your accountant’s fee. Your accountant will become more involved in your business operations to keep track of all monetary details. Your accountant will make sure that your accounting standards are the same as those followed by your clients or third-parties. In the case of differentiation, he will update both parties.
Furthermore, you will be responsible for the final version of your year-end financial report. This means, that you will have to sign the final copy and attach a written proof to ensure that you have acknowledged all entries.
Small business owners will not have to worry about their business accounts. Your hired accountants and bookkeepers will collaborate and prepare a professional, error-free year-end report. You will be able to use these reports for obtaining bank loans and future investments. Finally, you will not have to worry about the CRA audit as your experienced accountant will update them for you.
Small businesses need to hire professional accounting services to prepare the year-end financial statements for the year 2021. Your accountant’s tasks and fees might increase due to it.
Read More :