Are you paying for compliance accounting or advisory accounting? Do you know?

Compliance accounting is straightforward – it deals with day-to-day accounting, reporting, and tax preparation. But what about advisory accounting?
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The Intuit Tax Council defines accounting advisory services as, “Taking client challenges and applying strategies to create opportunities in service to their growth.” Accounting advisory interweaves technology, relationships, communication, and strategy to provide companies the fuel needed for profitable growth. 

The summer months are typically a less busy time for accountants, which means this is the perfect time to do the planning and cleanup work that tends to get pushed to the backburner during the year-end close rush and spring tax season. Use this time to embrace a culture of continuous improvement – looking for places where you can overhaul whatever is broken and streamline areas that are not working optimally.

So, how do you identify where your accounting department needs to improve?

Ask your accounting team and any staff that deals directly with them where their pain points are and what they would prioritize fixing. By including both the team’s feedback and the rest of the organization’s perspective, you will get more balanced input on what kinds of changes should be prioritized.
Focus on operations, processes, and policies with the potential to have a big impact on either efficiency or accuracy. Possible areas to focus on include:

A guest post from our partners at CFO Selections.

With an increased focus on financial planning and analysis (FP&A) in recent years, many companies have begun asking, “Do accountants do financial planning?”

For cash-strapped startups and small businesses the temptation to simply add to their accountant’s workload is strong. However, this is not a wise decision. While overloading any one role presents problems on its own, entrusting accountants with FP&A poses its own unique risks.

The differences between accounting and FP&A necessitate that it be handled by separate personnel with unique skillsets and performance objectives. Understanding what FP&A entails and what is at stake can help organizations make smart decisions about who should handle this critical responsibility.

The Association of Certified Fraud Examiners’ Report to the Nations reveals that on average companies lose 5% of their annual revenue to fraud with a median loss per case of $125,000 and an average loss per case of just over $1.5M.

The report further elaborates that more than half of businesses never recover any of the lost funds.

While only 20% of fraud is reportedly committed by business owners (compared to 41% by individual contributors and 35% by managers), the cost of owner-run fraud schemes cost their businesses 10 times more on average than fraud cases committed by lower-level employees.  

The average perpetrator of fraudulent crimes has been with the company for 1-5 years and engages in their fraudulent activity for 14 months before being detected. And small businesses typically carry a higher fraud risk than their larger counterparts with twice the rate of billing fraud and payroll fraud and four times the rate of check and payment tampering. 

No one wants to believe that fraud could be happening at their company, but these statistics tell the true story – fraud is far more widespread than many people think.

So, how does this kind of fraud occur and why is the risk of fraud higher this year than previous years? And most importantly, how do you identify fraud and what can you do to prevent it?  

We see a variety of circumstances in our practice at ASP, whether it be outsourced consulting needs, or an organization growing and needing to consider a fulltime resource. Our recruiting efforts are responding to those fulltime needs daily. The pandemic has shifted the business landscape significantly, making strong financial leadership universally important.
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Small companies that previously had their CEO at the helm of financial operations have realized that they need a fulltime controller to oversee their accounting operations and staff. With the increased demands of operating during financially uncertain times, CEOs need to focus on their core role of running the company overall (pivoting and shifting as needed), while entrusting another professional with the financial management of the company.

As a result, hiring a fulltime controller is no longer optional these days with the following business trends occurring:

Your accountant just gave notice, what do you do now?

Hopefully, your accountant gave you more than the obligatory two weeks, but regardless of what the timeframe looks like, the steps are the same:

1. Try to ascertain why they are leaving
2. Work on hiring a replacement
3. Handoff information
4. Part on good terms
5. Remove system access

​Time is of the essence in this situation, especially if it coincides with a closing period or tax season, so you should get started immediately!

Recent data shows that on average employees change jobs every 15 months. Contributing to this turnover is a lack of employee satisfaction in the workplace. Globally, 85% of employees are unhappy at work, resulting in diminished productivity and increased employee churn. Furthermore, survey data shows that 40% of dissatisfied employees change jobs as a result of their dissatisfaction.​
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Top employers understand that replacing employees is expensive and can thwart efforts to innovate and grow revenue. In fact, it can cost up to a third of an employee’s salary to find a replacement. And while employee turnover can cost a company greatly, employee retention can increase profits as well as provide a host of other benefits.

Reducing costs and boosting revenue makes employee retention a win-win. Improve employee retention rates this year by investing in your employees in six critical ways: 

Cost cutting is the benefit most often associated with outsourcing. Subsequently, business leaders looking to reduce expenses may jump at the opportunity to move costly functions to third-party vendors without regard to the numerous ways that outsourcing can be advantageous to other areas of the company. However, it is important to recognize that while cost savings may occur, this is not the only benefit of business outsourcing. In fact, cost cutting may not even be the biggest benefit. 

A guest post from our colleagues at CFO Selections:

When adversity hits, the knee jerk reaction is to swiftly cut spending across the entire organization, but that response is a mistake.

Strategic cost cutting can keep a business going through tough times, but it must be approached with long-term value in mind. Reducing costs should abide by three essential principals:

1. Do not cut anything that is required to sustain daily business operations
2. Do not cut costs anywhere where the long-term effects will outweigh the short-term benefits
3. Do not cut anything that will cost more to replace later

​Evaluate your spending and determine where you can cut costs to weather tough times while still protecting critical functions, minimizing long-term expenses, spending where it could end up costing more not to do so, and looking for opportunities to reduce waste.