Why Business Accounting Matters
The One Thing that Significantly Impacts all Business Functions
Why Accounting Matters for Operational Effectiveness
Imagine a scenario where your business is taking off. You’re experiencing significant growth, the sales team is closing deals left and right, operations are at full steam and revenue continues to climb. Sounds like an ideal situation, right? It is until you get to a point where the accounting and finance department can no longer keep up.
The proper infrastructure wasn’t implemented from the outset and now your business is struggling to scale effectively. Each accounting function requires hours of manual labor and calculations. There is no consistency with pricing and margins so budgeting and forecasting become a shot in the dark. You quickly come to the realization that the level of growth and all of the momentum you’ve built may soon start to decline because you’re unable to truly understand the financial health of your business and accurately plan for the future.
I entered this exact same scenario with a client a few years back. When I came on board, the executive management team had just started to realize the impact of not having an adequate finance department. Fortunately, they were willing to apply the necessary resources to develop that critical role in order to better manage the profitability issues that were occurring.
That’s the funny thing about accounting/finance - it’s typically viewed as an administrative, non-revenue generating activity and therefore a bit of an afterthought in the overall business planning process.
While technically an administrative function, it’s the only administrative function that can significantly impact all other business functions.
As I began working with the executive team and implementing the necessary financial framework and procedures, we were able to deliver detailed analysis that helped reduce costs across all departments and significantly improve operating margins. This impact was felt and recognized by all levels of the team from middle to upper management as it not only improved performance but also provided clarity on how different decisions impacted operations. With the added structure and clarity the company was able to better forecast and strategically plan for the future. Feeling that the ship had been righted and the company was heading in the right direction, overall morale improved and the business went on to further outpace its previous term of hyper-growth.
Point being, don’t wait until your business is in a position that could jeopardize its long-term success and your livelihood. Put the proper accounting and financial structure in place that will enable and empower you to capitalize on every opportunity available. Hatcher CFO can help you build and implement those functions so you can rest assured that no matter what lies ahead you’ll know exactly how to effectively strategize a plan utilizing sound financial and accounting guidance.
Some additional things to keep in mind when thinking about the role of an effective accounting and financial structure in your business…
All departments depend on financial data to operate effectively:
For revenue and profit-generating functions (sales and operations) it helps ensure the right products are sold for the right price to the right customers.
For all administrative functions it helps guarantee they’re able to operate as profitably as possible while maximizing the utility provided to sales or operations.
Detailed financial analysis will identify:
Opportunities for cost savings
Unprofitable customers and/or revenue streams
Ineffective departments and/or managers
Planning and Strategy ensures:
Maximized effectiveness and availability of resources
Management accountability
Framework for the road ahead
Sensitivity-based budgeting
Financial controls and fraud prevention:
Safeguarding of cash available to deploy
Efficient use of time for executive teams
Let Hatcher CFO help you set the financial groundwork for your company - contact us today to discuss your specific needs and objectives.