You’ve got someone to do your federal and state income tax returns, and you have a bookkeeper. So that’s all that a small business needs when it comes to having an accounting department, right?
Wrong.
Large companies have many functions in their accounting departments, and small and mid-sized businesses need many of the same functions as well. They just won’t need as many staff to handle them. Many of these functions will fall on the CEO, but a smart CEO will find a way to delegate some of the accounting duties to free their time up.
Here are a few things you’ll want to have covered in your small business accounting department:
Accounting Software Expertise
Who do you have on your team that can identify opportunities for making your accounting function run more efficiently? The solutions could include training on your current system, or identifying a new accounting system that will save a tremendous amount of time and money.
Your accountant may also know of some software applications that can do what you need faster, better, and cheaper. For example, manual data entry is a hot spot of potential; today, you can find software, scanners, and even apps for smartphones and tablets that can automate data entry.
Business Performance Advice
Are you getting accounting reports that tie to the areas where you have challenges and issues? If not, let your accountant know where those areas are. They may be able to suggest some reports that will provide you with insight and enlightenment.
If you’re receiving reports with lots of numbers you’re not sure how to interpret, ask your accountant for help. They can help you interpret the numbers, as well as put them into a graphical format so that it’s more visual for you.
It’s All About the Revenue
The number one challenge of most small businesses is to attract more business and generate more revenue. Your accountant can present tools to help you see what happens when you change price, impact mix, or adjust volume.
Keeping the Cash Flowing
Another way to put your accounting department to good use is by helping you understand your cash flow. If your business seems to stampede through cash, you’re not alone. Ask for regular cash flow forecasting reports so you can plan ahead and be ready for the valleys and hills.
Beyond Compliance
If your accounting department focuses on compliance work alone, such as taxes and record-keeping, you’ll miss out on allowing it to become a profit center of sorts. With these added functions, you’ll discover new actions to take in your business to drive profitability. You’ll therefore have clarity about decisions like price changes, and you’ll know your accounting function isn’t wasting time and money.
Take a look at your accounting department, and contact us at Innovative Financial Services, LLC to see how we can help you plug any of the holes.