By Stewart Brannen

accountingLet’s face it, the day-to-day responsibilities of running any business can wear the best business owner down. Owners are constantly drumming up additional sales, returning emails, answering the phone or putting out multiple fires, just like an octopus with several arms. This can be very arduous at the best of times. Stressful as it is, it can be even more difficult if the businesses financials are out of sync with their daily operations or if there are variances and inaccuracies in them. This might lead to poor decision making and ineffective planning. Either way, in this article I will discuss why good financials are a vital necessity when it comes to running any business, and that having a good accountant who can generate timely and accurate financial documents can be even more critical in preventing a mountain of headaches for any business owner.

As a business professor and management consultant, one of the things that I emphasize when it comes to staying focused on achieving quarterly goals and annual performance targets is to have accurate financials. As fundamental as it sounds, I’ve been surprised in my career to see so many business owners fly by the seat of their pants when it comes to managing their sales revenues, spending patterns and bottom line profits. The typical reasons I normally hear from business owners for this go something like the following; “I know the general ball park of things” or “I know what my margins are” or “We came in at about the same ratio as last year.”  Sound familiar?  These sorts of statements are representative of the crazy reality that can creep into the daily running of any business. This can affect financial decision making and performance. More to the point, they can be cancerous and deceptively costly at the same time.

How To Choose A Good BookkeeperOne of the best examples I can give here would be like a business owner estimating how far they could drive while observing that their gas tank gauge is on EMPTY. “We are good for another 20 miles” yells the owner, meanwhile the car is actually only good for another 3 miles and the nearest gas station is 10 miles away. That’s a long 7 miles to walk, isn’t it?  Yet when it comes to managing without accurate financials, I see this sort of activity happening all the time. This often leads to the business owner having to fork out unnecessary dollars from their own savings or making a draw on their bank line of credit to meet the cash needs of the business. The solution can be as easy as never letting the gas gauge go below the quarter level, or by having clean, accurate and timely financials that are generated by a dependable accountant or bookkeeper who knows what they are doing. The emphasis here is on reliability and expertise when it comes to putting together the key information that a business owner needs to ensure that they will get the best mileage out of their business decisions.

Put another way, compiling and understanding the allocation of revenues, costs, expenses, interest rates and taxes, and how they impact the income statement, balance sheet and statement of cash flows can be a bit of challenge for any business owner who doesn’t have a financial background. This is why it is critical to have the right person on staff who can competently perform the role of accountant or bookkeeper and who can provide the business owner with the financial information that they truly need.

So what would I look for in hiring the right person for the accounting function in my business?  Here’s a list to consider:

  • How many years of accounting experience do they have and are they certified? Are they green behind the ears or do they have experience to do the job?
  • Are they familiar with the type of industry and business that I am in? Have they had hands-on experience with my line of business and do they know how my business finances should be recorded?
  • What is their attention to detail, financial accuracy and meeting of deadlines?
  • What examples can they give on how they have reconciled financial documents in other situations for other business owners?
  • What has been their track record for producing timely and accurate financials, and what examples can they provide?
  • How has their skill set and knowledge of finances helped other business owners like myself?
  • What examples can they give to show that they are trustworthy and responsible?
  • Do they have at least 3 references that can vouch for their credentials and work ethic?
  • Have you researched what questions to ask perspective applicants to see if they really know what they say they do?

When taken into consideration, these questions will help any business owner better understand what they should be looking for in hiring an accountant. A strong accounting professional on staff, or who is hired on contract, should be able to provide accurate and timely financial information. By having good financials on hand that are produced by an experienced accounting professional will prevent problematic business decisions from being made and ensure that financial goals are met. Any business owner who takes the time to rely upon the services of such a dependable and competent professional will benefit from gaining that extra mile in financial performance in their business.