Success with Outsourced Accounting
We all understand we need to make a profit to be sustainable but how do we monitor and utilize the finance information of our business to maintain that profit? You must have timely, accurate and useful financial information. For many businesses this means you will outsource your bookkeeping, accounting, and tax duties. How you successfully manage this part of your business depends on three key actions.
Steps for Getting your Accounting Done Right
Lead – First start with educating yourself. Find classes, webinars, blogs, videos, books, podcasts, articles, mentors, etc. that focus on the financial side of running a business. Include industry relevant information to speed up your learning curve. Realize you won’t learn everything you need to know right away, but you can know enough to successfully manage this aspect of your business. The more you pay attention to the financial activity in your business the faster you will learn. A good accounting team will help you learn this part of your business. With knowledge comes merited confidence to lead.
Trust – Let’s face it, you will need to put trust in the professionals you hire. This is hard for some and too easy for others. Be confident they know what they are doing and care about your success. Just like when hiring within, look for professionals who fit the culture of your company, have the required skills, and have integrity. Be clear and realistic about your expectations. Have internal controls in place that protect you from fraud or embezzlement. Real trust comes from having the right resources and systems in place.
Verify –Check references from reliable sources. Interview multiple candidates whenever possible so you didn’t settle for the only choice but instead make the right choice. Have clear and accountable expectations by utilizing written agreements and checklists. Most commonly you will engage different companies to make up your outsourced accounting department. Treat them as a team that collaborates with each other to achieve the best results. Look at the results of their work and ask questions. Ask for detailed reports instead of only relying on summaries. The Profit and Loss, also referred to as the Income Statement, shows you the total of all transactions for an expense or income line. To be confident everything was put in the proper category you should look at the transaction list for each account. You can do this monthly or as a spot check throughout the year. Compare your business tax return to your financial statements before you file to see that they reflect the same financial story. Monitor the sources of their information such as bank statements, and reports from operational software such as inventory or point of sale. Trust but verify. It is that simple!
Knowledge = Competence
It is hard to successfully manage the financial side of your business when you don’t have a good understanding of what you are managing. You don’t have to be a degreed accountant or have an MBA in Accounting to be the steward of this essential part of your business. You just need to care enough and invest effort into this aspect of your business. The business owners I work with are always pleasantly surprised at how quickly they built their financial awareness and confidence. Remember you only need to learn what is relevant to your business model.
