Do you know who’s doing your accounting?

I’ve recently experienced small businesses complaining about efficiencies in the accounting and finance area. To put it simply, month-end financials just aren’t getting done on time and as a result senior management’s decision making is affected. Owners want to know exactly how the business is doing and a snapshot of their financials in a timely manner in order to take decisions such as whether or not to invest the excess cash, do we even have excess cash, if so, how much? Should we hire a brand ambassador to drive sales or in other cases how to diversify. One of the worse things that can happen to a small businesses is lack of information or better yet, lack of timely information because of which many good business growth opportunities are missed.

I’ve heard owners in the automotive, food and retails businesses complain that despite of having the financial means they are unable to grow their business or they simply don’t know what the problem is. There are many reasons that cause a delay in financial reporting and one of which is not being able to manage staff properly.  Companies growing quickly have many fast moving parts and one extremely critical is skilled capital.

When a business has rapid growth, it’s easier to fill gaps internally as opposed to hiring externally, doing interviews, spending time that you don’t have to train, etc. It’s just easier to have Jenny at reception answer phone calls at reception, book appointments, schedule meetings and now post invoices as part of company expansion. Even if John Doe has no previous accounting/finance/invoice posting training – he is now training on the fly and is responsible for a key finance/accounting function that require basic understanding of how to post an invoice. Sometimes you can get away with such decisions, but eventually things catch up. As a result of which, the person in charge of looking at the big picture, communicating important information to senior management suddenly becomes concerned for reporting accuracy. Therefore, it is imperative that companies assess themselves periodically to ensure they are functioning in a way that is consistent with their vision/mission – and that makes sense for them, even if it means a little bit of a struggle in the beginning to set it up right the first time. At the end of the day what’s important is to do it right even if it takes a bit longer or seems inconvenient.