What Your Accountant Must Explain to You

The accountant is one of the most important professionals who can influence the success of your business. Their role is not limited to filing tax returns and keeping accounting records. They should be your trusted advisor, providing you with the information and clarity you need about the financial health of your business. Here is what your accountant must explain to you.

1. Tax obligations and deadlines

One of the accountant's core duties is to inform you of all the tax obligations you have, as well as the deadlines for meeting them. This includes:

• Corporate tax - how much you owe and when it must be paid.
• Value added tax (VAT) - if you are registered under the VAT Act, your accountant must explain to you how to charge, declare and pay this tax.
• Personal income tax - especially if you run a sole proprietorship or are a self-insured person, as well as if you earn some type of income without an established status as a taxable person, which has become a common practice in recent years - trading in financial instruments, cryptocurrencies, online sales delivered by courier, influencing, etc.

In addition, the accountant must warn you of upcoming deadlines so that you can avoid fines and penalties.

2. The social-security system

Your accountant is responsible for informing you of your social-security obligations. This includes:

• The amount of social-security contributions you must pay for yourself and for your employees.
• The types of insurance - pension, health insurance, unemployment and others.
• The deadlines for paying social-security contributions.

The accountant must also inform you of how social-security contributions affect your personal income and that of your employees.

3. Financial statements and their significance

Financial statements are the key to understanding the current state of your business. Your accountant must explain to you:

• The balance sheet - what the assets, liabilities and equity of your business represent.
• The income statement - how to understand how much you are earning or losing.
• The cash flow - how to track the movement of funds within your business and avoid financial difficulties.

Understanding these statements allows you to make more informed decisions about the future of the business.

4. Expenses and tax optimisation

Your accountant must explain to you how to manage your expenses effectively and optimise your taxes within the law. This includes:

• Which expenses can be recognised for tax purposes.
• How to organise the documentation of expenses.
• How to use lawful opportunities to reduce the tax burden.

For example, if you purchase assets for your business, the accountant must explain to you how the depreciation of these assets affects your tax base.

5. Registrations and licences

If you are starting a new business or expanding your activity, your accountant, together with a lawyer where possible, must help you with all the necessary registrations and licences. They must inform you of:

• VAT registration, if you cross the threshold for mandatory registration.
• Licences and permits required for your specific activity.
• Registration obligations towards the National Revenue Agency (NRA), the National Social Security Institute (NSSI) and other institutions.

6. Employment contracts and salaries

If you have employees, the accountant must advise you on:

• The types of employment contracts - fixed-term, open-ended,
• Contractual agreements - civil contracts, management and control contracts.
• The way salaries are calculated, including social-security contributions and taxes.
• Your obligations as an employer relating to leave, sick leave and other labour rights.

This will help you comply with labour legislation and avoid penalties.

7. Planning and budgeting

The accountant can assist you in preparing budgets and financial plans. They must explain to you:

• What revenues and expenses to expect in the future, after analysing the commercial intentions you have for your business.
• How to create a reserve fund for unforeseen expenses.
• Which investments may be useful for your business.

This advice will help you maintain stability and grow sustainably.

8. Digitalisation and automation

Modern business increasingly relies on technology. Your accountant must inform you of the opportunities for digitalising accounting processes, such as:

• Using accounting software.
• Opportunities for electronic filing of returns and documents.
• Automation of invoicing and payments.

This will not only save time but also reduce the risk of errors.

9. Risks and how to manage them

Your accountant must help you identify potential financial risks and propose strategies for managing them. This may include:

• Avoiding delays in paying taxes and social-security contributions.
• Creating a strategy for dealing with insolvent clients.
• Reducing costs by reviewing inefficient processes.

Your accountant is much more than someone who keeps the accounting records in order. They should be your partner, helping you understand the financial aspects of your business and make better decisions. If your accountant does not provide you with clarity and support in these key areas, it may be time to reconsider your collaboration. Knowledge and understanding of financial matters are essential to the success and sustainability of any business.