In Pursuit of Profit
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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. 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: The next round of Paycheck Protection Program (PPP) Loans is now open, and businesses can apply through the end of March. Borrowers that received First Draw PPP Loans and have already used or will use the funds for authorized uses can apply for a Second Draw PPP Loan. While the first round of PPP loans was launched quickly with little prep time for advisors, many firms have since dedicated significant staff to assisting clients as they evaluate their financing options and submit PPP loan applications. The result is better support for organizations faced with making difficult financial decisions as they navigate an uncertain business landscape. So, as you consider applying for a PPP loan this time around, lean on an experienced third-party financial consultant to help you understand if you qualify, what the differences are from the previous round, and whether this type of lending is the best fit for your specific circumstances and long-term goals. Since this is the second go-round, the rules are more clearly defined this time, leading to less ambiguity and confusion than there was with the first loan program. Some of the differences this time around include: There are plenty of resources about the benefits of outsourcing, yet many business owners are still resistant to outsource their bookkeeping. Even businesses that outsource other activities tend to keep a tight grasp on their financial functions. Because cash flow is so important to small businesses, bookkeeping and accounting tend to be some of the last functions that business owners are willing to relinquish control of when they formulate strategic growth plans. But why? Why are some business owners still against outsourcing their bookkeeping? 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. 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: 12/21/2020 Will Technology Replace Your Accountant?As business technology continues to get more sophisticated, business owners may wonder if an accounting software can simplify their staffing needs while still providing high-quality bookkeeping and financial reporting. Accounting software companies would have you believe that managing your books is as simple as generating customer invoices, adding receipts for your expenses, and linking your bank accounts. And while software can certainly streamline these day-to-day operational activities, the question still remains, are these types of platforms a true substitute for your in-house or outsourced accountant role? So, can you replace your accountant with some shiny sleek software? 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. Since March, 62% of employed Americans have worked from home, which is more than double the previous figures from earlier in 2020. Furthermore, 59% of these employees want to continue to work remotely, moving forward even after public health restrictions are lifted. This sentiment has led businesses to examine the costs of maintaining a remote workforce closely. They are asking:
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:
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. Outsourcing is not a new concept. In fact, according to survey data, 37% of small businesses outsource at least one business process already. More technical tasks like accounting, IT services, and digital marketing are the most likely to be outsourced, but any business process can be handled by a third-party.
With less than 15% of business owners and managers reporting that they “feel like they are spending their time on the right activities,” outsourcing provides a huge opportunity to reprioritize your activities and drive the business forward. As Matthew Grattan explains, “As costs and competition increase, it’s time to ditch the ‘I can do it all myself’ mentality and offload those onerous back-office tasks.” While outsourcing can certainly be used to offload tedious activities, it can also be used strategically to obtain professional expertise in critical areas. Outsourcing frees up more time for selling and merchandising, which is especially important during times of significant growth. Many companies rely heavily on outsourced activities to scale up operations as new business opportunities become available. But what should small businesses outsource exactly? The word ‘downsizing’ is often accompanied by a cloud of negative connotations, but it is rarely the result of poor employee performance or leadership mismanagement. Instead, downsizing usually results from other factors like an economic slowdown, overcrowded market, plant closure, or manufacturing outsourcing. Downsizing is simply part of running a business, just like managing rapid growth, which means that leadership must plan, manage, and execute it correctly. At the most basic level, managing downsizing requires four steps: developing selection criteria, determining how much notice to give, providing outplacement support to employees that have been let go (where applicable), and protecting employee productivity and morale among retained workers. These activities are typically considered part of HR’s purview, but downsizing has implications that trickle down into other areas of the business. There are numerous bookkeeping implications during downsizing as well. |
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4/30/2021