You’re a business owner or a corporate executive, not an accounting professional. Your focus is on delivering a service or product, managing operations, maybe even selling. So, when it comes to addressing your company’s financial statements, you realize you need to rely on the experts.
Many businesses delegate this responsibility to a separate accounting department or defer the work to an outsourced accounting firm. Partnering with a skilled, experienced accounting team is one of the smartest decisions you can make for your business. But do you really know what to expect from your accounting professionals? Do you understand what a valuable partnership looks like?
Here are seven critical accounting needs that an expert team should be able to deliver to your business. Look for these capabilities as you evaluate your internal accounting professionals, assess your current partnership or seek a new option for outsourced services.
1. They should be able to get the numbers right.
This is the most obvious one. You must be able to rely on the accuracy and skill with which your accounting team is crunching and reporting on your business financials. Because all of your tax management, regulatory compliance and strategic decision-making is dependent on your numbers, it is absolutely essential that your accounting professionals are providing error-proof calculations and statements.
2. They should be able to tell you where your cash is going.One of the main duties of an accounting team is to help safeguard the financial health of the organization. To accomplish this, your experts must be able to identify and communicate cash flow realities. As the owner or CEO, you can’t make wise, profitability-driven decisions without having a clear picture of where the company’s money is being spent. Your accounting team’s ability to report and advise on this aspect of your financials affects your capacity to develop short- and long-term strategies that promote strong cash flow and financial well-being.
Having a well-scripted plan in place doesn’t automatically propel your business toward financial success. It’s completely possible to meander off course or end up in a dangerous financial position. In fact, many organizations forecast incorrectly or deal with unexpected monetary strains that affect their overall outlook.
3. They should be able to tell you how you are comparing against your plan.
Therefore, it is imperative to work with an accounting team that can track your company’s financial progress against the company’s devised plan. Whether you’re meeting all goals and projections or failing to match your stated financial objectives, you need visibility into this information in order to move the business forward.
4. They should be able to tell you where to make adjustments to the budget.Your business isn’t stagnant, and your approach to achieving financial stability shouldn’t be either. There will be necessary pivots to protect the company’s bottom line. Your accounting team must be able to coach you in this area, advising on smart budgetary adjustments that foster a positive financial outcome.
The areas of your business that are afforded the most money are typically the areas that flourish, so it’s vital to ensure that your monetary designations properly reflect your priorities. In addition, your budget will require deviated approaches to seasonal shifts, economic changes, internal needs and other influential factors. As such, you need an accounting partner that can make these experts recommendations and reallocate your budget appropriations accordingly.
5. They should be able to look both backward and forward.
Yes, accounting involves delving into accounts payable and receivable, poring over past financials for tax purposes and reporting on the existing numbers. Your team should definitely have the skill and experience to look backward into your books and statements -- but that’s only one half of the financial equation. In addition, they should be able to look ahead and focus on the future.
Accounting professionals must be equipped to manage your numbers and provide valuable advice that’s based on both historical figures and future insights.
6. They should be able to tell you how your bank and auditors feel.
Your financial institution and/or investors play a critical role in the company’s current and future success. If your accounting team can’t help you understand the perspectives of your bank and auditors, you’re approaching this aspect of your financial status blindly -- an approach that is not conducive to health, growth and profitability. You must be able to rely on your accounting professionals to deliver valuable insight into these financial relationships and lay out a clear picture of where your bank and auditors stand.
[Read More: How to Cultivate Your Relationship with Your Bank]
7. Your CFO should be a liaison to the board and the investors.Your accounting team should be managing all of the aforementioned services under the direction of the Chief Financial Officer. From cash flow management, tracking, budgeting and projections to investment and loan interests, the accounting team is providing key financial insight. To effectively communicate that insight to the board, the CFO should serve as a liaison in this capacity, funneling key performance metrics and reports to board members for informed decision-making.
It’s important to understand that your accounting team is not an extension of your business, but rather a pillar of its foundation. They provide services, knowledge and expertise that few, if any, companies can survive without. That’s why it’s essential for these professionals to be able to deliver the well-rounded capabilities mentioned here. Make sure that your team is qualified to serve these needs well in your organization.
Looking for an experienced financial partner that can support your business’s success? Speak with a strategic financial professional to begin the conversation.