Expect More from Your Accounting
Before I enlighten our readers on the ways a business owner can expect more from their accounting team, I’d like to first provide some insight into accountants themselves, as it’s relatively important to understand their world and frame of mind.
Your typical accountant loves accounting, and whether they make it complex or simple, it’s a numerical puzzle that only they can solve. And we, as business leaders, love accountants because (if done correctly) they take the complexities of financial computing off our hands. Running a business isn’t a walk in the park – neither is accounting – so, naturally, business owners typically don’t want to dive into the dusty details.
Sometimes well-meaning accountants can make things too complicated, whether they use archaic methods or focus on ineffective data. Excess complexities such as these can be debilitating to a business, leading to unusable financial reports sent to management, and delays in getting information needed to run the organization. Over-complexity can also translate to excess spending on accounting services, which further cripples your company. Here are a few things business owners can do to combat accounting fatigue.
Ask “Why” – Don’t Just Say “Yes”
Business owners are insecure a lot of times when it comes to questioning if something is set up or executed in a fashion that is too complex. Going back to why we love accountants, it’s far easier to simply say “yes” to the accounting than to dive into the technical requirements of accounting. Chapter 1 in all accounting textbooks pushes for accounting to be timely, accurate and relevant. For real-world managerial accounting, there are multiple ways to skin the cat.
The key takeaway for the business owner is to focus on what you need to see, how you need to see it and when you need to see it. Those unusable financial reports need to be morphed into relevant, timely reports that give you insight into your business’s financial status.
Break it Down
Break down the details you need to see. How do you need your reports to be formatted? Do you want to see what’s changing (likely), do you want to see actual vs. budget (very likely); do you want summaries, details, and/or comparisons? You’re President/CEO Goldilocks, on the quest for perfectly proportionate and accurate details. If you get too deep in the weeds, consider having multiple versions of your financials at specific intervals (i.e. a multi-level comparison, but only annually).
Have confidence in your ability as the owner to decide how much detail needs to go into your chart of accounts. No one knows your business like you do, after all. Accountants do great work every day, but it’s important for you to understand that the accounting is done for you, the business owner, and your team is a critical tool to running said business successfully.
Get a Second Opinion
If you suspect that your needs are not being met, I encourage you to lean into it with your accountant and challenge them. If you are still not satisfied, seek the advice of another trusted accounting expert for a gut check. I am always eager to help business owners in our mission of delivering timely, accurate and relevant financial information.
A real-world example for you: We once interviewed a company some time ago and guess what their largest department was? Accounting. They had 2,500 accounts set up with hundreds of subsidiary spreadsheets where they were doing manual reconciliations. To top it off, the Board of Directors had never even seen a set of financial statements. Since there was no relevant, timely reporting to give insight to management, the owners believed the accounting department was doing its best and hadn’t considered an alternative. We came in and saved that company over $100,000 a year on their accounting expenses alone and provided a level of reporting that they didn’t even dream possible. While an extreme example, we see similar situations all the time as businesses grow and their methodologies don’t.
Business owners have enough challenges on their hands; they don’t need to suffer from inefficient, costly and non-useful accounting. If you want to learn more about my business, I welcome you to take a look around my blog or call me to speak directly about your needs at 501.374.8123.
Owner, CFO Network