By definition, the stated goal or necessity for any business is the generation of more resources than are consumed by operations. Even non-profit or other socially-minded organizations need to track changes in net worth and the impact of those changes on the organization’s ability to continue to provide services. With this in mind, the following question is often asked by business owners: How can accountants add value and help the company achieve their goals and objectives?
Most new business owners make cost reduction their first step when faced with cash-flow or other financial constraints. This is not only challenging, but it is also quite risky to carry out the cost-cutting task yourself without the help of experts. The experts are there to take care of these financial complications. Through careful planning such as supporting documents, models, backups, and solutions, experts can monitor startups and help them reap multiple benefits. It is always better to obtain the support of professional accountants so that companies can be managed strategically.
Companies, specially those that are in the start-up phase, can benefit from the help of professional accountants in the following ways:
Risk Management
Accounting professionals are useful as they help assess the risks involved and can help forecast the outcome of the business decisions. Accountants can be key resources for planning financial guidelines and setting achievable short-term goals that are consistent with long-term targets.
Calculated Decision-Making
With the help of professional accountants, management can make confident decisions to invest, buy, grow, sell etc., based on cost-benefit analysis, margin analysis, break-even analysis, scenario modeling, etc.. Accountants can also help business owners to design resource management plans and financial strategies for the long-term growth of the business.
Assessing Business Performance
The path to success for the growth of any company depends on a regular review of the business performance. Hiring professional accountants can help to assess business progress and also help identify the different business trajectories that are important to improve sales outlook and reduce business cost at an early stage.
Cash-flow Management
Accountants can advise companies on cash flow management through the development of cash flow projections that can be monitored at regular intervals. The projections can also be provided to lenders who can provide a competitive line of credit to help manage the company’s regular payment cycles while other important business needs are met through operational cash-flows.
Providing Reliable Financial Information
Accounting experts can put management’s plans and ideas on paper to assist in the securing of finances and help business expansion. Accountants can also provide insights on cash-flows, working capital, financing and KPI monitoring as part of business reporting. These days, businesses in all industries face challenges from regulators, investors, customers and even competitors. All these stakeholders expect more information, analysis and reliability in the company’s results. In addition, auditors and industry analysts also need to understand the source and quality of the data.
This article was originally published in The Accountant’s Diary on March 6, 2021.
