Well, the answer to this question should be a simple “Yes” but i’ll try to give specific arguments. Insurance is a necessity in any business. Your accountant will probably advise you to get a business insurance. Businesses cover themselves against losses such as fire, theft and unexpected natural disasters. It is with the bookkeeping or accounting that owners get it wrong. On successful insurance claims, a payment is normally made to the insured. Insurance companies settle claims on assets, on its book value and not its costs. Even though this principle might vary from country to country, book value is widely accepted as default. Since most small businesses fail to maintain proper fixed assets registers, insurance companies perform “desk top valuations”, or make an “estimate”, on the book value, mostly much lower than its “real” book value. Without proper records, the claimant cannot debunk the assessor’s final conclusions. An insurance claim, wrongly entered as “income”, can be adjusted by transferring the amount to the disposal account. After effecting these entries, the disposal account should balance to zero. Your new records would reveal, the loss or profit on claim (income statement), settlement in bank account, fixed assets less the stolen/lost asset, and a lower depreciation estimate for the year. I know that this is your business accountant’s job, you however have a duty to provide accurate records. Also, if you’ve got a charity accountant and you are take part in charity missions, you should include those records too.
So, if you care about your business, get a business insurance for it because it will help a lot.
Tags: accountant, business accountant, Business Insurance, charity acccountant, fire insurance, theft insurance
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