Good Stewardship, or How to Look After Your Money
Accountancy among other things is about encouraging good stewardship of your money. That is being able to show you how you stand at a particular moment in time. It is also about explaining your activities over a period of time. But it should not be thought that the accountant only looks at the past. He must also be able to assist management and those in governance at quantifying plans for the future. Those in governance should have a strategy or mission statement of where they want to go in the future. This in turn leads on to operational plans or budgets which in the case of bigger businesses will involve setting sales budgets, production budgets, overhead budgets etc. and linking to cash budgets. In the case of a small concern it may be that the cash budget or simply cash forecast is the main budget or plan prepared. The accountant can assist in this process. The roll of the accountant also covers advice on taxation. This may include being made aware of the correct time span of when to make purchases of fixed assets qualifying for capital allowances or when to consider transferring from self employment to limited company status. Or it might simply be completing statutory tax returns for individuals, partnerships and companies.
What do you think? What does good stewardship mean to you?