Everyone knows the basics you can lean on your accountant for: payroll, CFO solutions, file cleanup, W-2 and 1099 processing, etc. How about the other nitty gritty areas of your business? The ones that just even beginning to think about embarking upon make your head tilt-a-whirl a bit? There are numerous areas your accountant can help you with that many people don’t consider. Perhaps if you have a new business, you’re still considering when to hire an accountant. You figure you can make it on your own for a little while… Although, if you were aware of some of these other things that an accountant could help you with, you would probably rethink your strategy.
Here we go. Let’s crank up your revenue!
Whether you’re just starting off, or you need to figure out what the next step is, growth planning is an integral part of your success. The viability of your business is at stake if you don’t have a proper plan in place.
Proper planning starts off with knowing your strengths and weaknesses. It’s also essential to be aware of potential opportunities for growth.
Where will you be in 3, 5, and 10 years from now?
Who will do what?
When will they need to do it?
A common missed factor of growth planning is finding your value proposition. This is the thing that sets you apart from your competition. What do you bring to the table that they don’t?
Making yourself an authority in your industry can lead to tremendous growth opportunities.
Cash Flow Management
Ah, yes, cash flow. I know some of you just had your eyes glaze over. Don’t forget that we accountants have superpowers in this area. We know these sorts of things. Are you familiar with the term, “Cash is King?” Many business owners have no idea, at this very moment, where their cash flow stands. Some are probably not even sure what is involved in cash flow management. That’s okay! You just need to get someone who can storm through the potential evils of cash flow-ville, and eliminate the villains!
So what are some of the factors you should know regarding cash flow? You need to have a firm grasp on positive cash flow, negative cash flow, and what your break even point is (particularly if you are a new business). The depths of cash flow extend way beyond those three things, but that is where an accountant can be an astounding asset for you. They will be able to help you determine these factors, and give remarkable insight as how to improve cash flow, how to expedite accounts receivable, and implementing strategy. Win!
An accountant can help you understand what you can expect your cash balance to be in 3 months, 6 months, and one year from now. Why is that so important? Well, trying to operate your company without understanding cash flow, is much like jumping out of an airplane without a parachute. It may be thrilling in the moment, but I promise you, it won’t have a happy ending!
You got into your industry or profession because it is something you are good at and have a passion for, undoubtedly. There are many areas of your business that you are dynamite at managing! Is running an expense analysis one of them? Maybe it is. Think for a moment about how crucial understanding your revenue versus your expenses is to your business. It is vital! Are you the most qualified person to tackle this? Here are a few questions you should ask yourself to see if this is something you can (or more importantly, want) to handle on your own:
1. Do you know how to analyze your income statements?
2. What is your estimate of expenses for the year?
3. What is a variable expense vs. a fixed expense?
4. What’s the difference between profit margin and gross margin?
Knowing the answers to these types of questions will be factors utilized to determine the efficiency of your business, and where there are areas for improvement and growth!
Financial forecasting plays a role in both of the two aforementioned categories above, or rather they play a role in financial forecasting. Financial forecasting is defined as an estimate of a company's financial future outcomes. So of course expense analysis and cash flow play into this.
With financial forecasting, however, the intent is to focus on revenue and growth. For start-ups, this can be just as much of an art as it is a science. Having a knowledgeable accountant is helpful in the research and planning stages.
For established companies, a monthly or quarterly forecast is pertinent to ensure continued growth.
For start-ups, it’s nailing down:
cost of goods sold
This is something any business can use, but people looking to make large scale changes in their existing business, or start a new business, will see an immense benefit from this service. With a qualified superhero (a.k.a. an accountant) on your side, though, nothing is too overwhelming or impossible. Here are some of the things that will cause the tilt a whirl effect I mentioned earlier:
reorganizing company structure
installing budgetary control systems
development of corporate strategy
strategic decision making
resolving complex issues
Processes and Procedures
Okay, we get it: this one can be snooze central and invoke the urge to bang your head against your desk. Please don’t harm yourself; just delegate! I Promise, we will keep this section short and sweet.
With setting up or expanding any business, there is an absolute need to to determine your processes and to format procedures accordingly. Having these processes and procedures in place and written down will help support the ease of any future expansions or developments within your business!
This includes internal control processes. Not sure what those are? They're processes for assuring achievement of an organization’s objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies.
It may not be an exhilarating topic for most. Lucky for you though, it is for accountants!
The most important thing about all the areas we just covered, is making sure these are all being done and managed properly within your business. If you've got it under control, then, congrats, that is fantastic!