In Pursuit of Profit
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While outsourcing overseas used to just be a cost-saving measure, many accounting firms are now facing labor shortages that are forcing them to take this step out of necessity, not of their own choosing. The Washington Post declared that “The remote revolution could lead to offshoring Armageddon” and though that is likely an exaggeration, it demonstrates how desperate many employers are these days to find personnel to do the work that needs to get done.
CPA firms, large employers, and companies with complicated ongoing financial needs are in a pinch. They need skilled employees to do the work that keeps their businesses running but with a dearth of qualified candidates available, their options are limited. However, offshoring is not the only solution! It is often a far better option to upskill your existing employees to assist with this work than to send it overseas. As a fan of Star Trek, one thing I like to ponder about is the concept of time dimensions. Can you be in two points of time at the same time? For many people, living in a pandemic has made the sensation of time change. Things have simultaneously seemed like they happened long ago and also only yesterday. And, at one point or another we have all thought, “It seems like it was years since I saw you. Wait, it has been years!” But time has more than just social implications. The concept of time is relevant to you professionally as well, especially as an accounting manager or a member of an accounting team. To have an effective accounting and finance team, an individual’s time view preference must match their job responsibility. If it is not, your accounting operations may suffer, and your company may experience unnecessary attrition. What do I mean? When a company is undergoing a significant shift, like a big cultural change or a change of ownership, a financial assessment can give them a comprehensive picture of where they are financially to aid in their strategic planning. A business financial assessment helps with decision-making related to everything from short-term cash flow management to long-term vision-setting. Over the last year and a half many companies have brought in consulting accountants and fractional CFOs to assess their current financial position. Let’s take a closer look at what a financial assessment includes and who is best poised to conduct one. The last decade has ushered in a digital revolution across all business areas. However, many businesses are still dragging their feet when it comes to automating their accounting and finance activities. In fact, 58% of finance teams surveyed indicated that they do not feel their finance back office is “sufficiently automated.” Despite a plethora of tools and platforms available to help streamline these critical business areas, it seems many businesses are stuck in the past, relying on manual processes for their daily accounting functions. But organizations can use automation to drive profitability if they understand its benefits and can identify areas where AI will help them the most. Written in conjunction with our partners at CFO Selections A cash flow shortage is the number one reason why small businesses fail, but even mid-sized and large companies need smart cash flow management to survive and thrive. Insufficient cash forces companies to make difficult decisions about who is going to get paid and when. Unfortunately, this can lead to vendors and suppliers being paid late, being overdue on rent, even employees waiting on paychecks. It is not an exaggeration to say that cash is the lifeblood of any business. Not having enough money to pay for expenses can erode business credibility, which leads to:
Ultimately, a company’s potential will be stifled if there is not enough capital to invest in the assets that facilitate growth, and its very existence can be threatened as well. So, are you ready to manage cash flow for the coming year? 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? 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. As an accounting recruiting firm and financial services provider, we work with businesses everyday who ask, “Should we hire or outsource our accounting needs?” This question is especially important for companies in the startup phase because they likely have significant cash flow concerns to consider. However, startups may also have other unique characteristics that make this question more challenging to answer, such as:
While every business will have their own unique needs and challenges, it is generally best for a startup to outsource their accounting activities initially and then hire internally as their needs change. Where does that shift happen? “Finance” is a broad term every business leader has heard, but it can mean many different things.
Businesses have banking relationships, investments they need to track, fundraising and financial analysis needs. Corporate Financial Planning and Analysis (FP&A), the work performed by Financial Analysts, is a complex specialty within Finance that all successful businesses need in some degree. There are multiple FP&A components of which every business requires a different combination. This complexity makes hiring to satisfy your FP&A needs difficult. To make matters harder, many accounting and FP&A functions can overlap. So how do you know if you need to hire a dedicated Financial Analyst or a hybrid accountant? It helps to first understand the components of Corporate FP&A, the value each adds, and how much time each activity should take. 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 2020 pandemic caused significant change across the business landscape. CEOs and business owners were put to the test as they decided how to strategically navigate the effects of the pandemic. As a result, many business owners have realized certain aspects of their company’s financial operations may shift indefinitely. As the practice manager for an accounting firm, I’ve been in a unique position throughout the pandemic because I’ve witnessed our client pool expand to include companies that would never have considered using a third-party accounting company to handle their accounting needs before. However, these business owners were put in a difficult position when in-person work was shut down and some key employees had to take time off for sickness or family obligations. Some lost their accountants to virtual school responsibilities, while others were forced to upgrade their desktop accounting systems to cloud-based versions so employees could collaborate remotely. As a result, business owners have now experienced first-hand that their bookkeeping and accounting work can be performed remotely without having to sacrifice quality and efficiency. In other words, the same value can be realized whether day to day accounting is being performed remotely or onsite. Let’s look at what business owners are telling our accountants, and what this means for the future of accounting and finance. |
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9/1/2022