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Risk of Incineration – 5 Reasons Why Your CPA Shouldn’t Be Your CFO

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Worried that your financial results are at risk because of an underperforming or underskilled employee? Are unintelligible reports leaving you with a feeling of dread?

Get the financial tools and systems you need to make the right decisions for business growth with complete confidence

Dean, CEO and owner of a $13 million feed and supply business, kept having money panic. It wasn’t that his business was failing… well… maybe it was – he just didn’t know. In his peer group of CEO’s, he was hearing that he should focus on the numbers. And despite his natural inclination – Dean’s a born salesman – he did. Or rather, he tried to.

There was one key figure that seemed totally out of whack – out of alignment with Dean’s decades-honed intuition about where it should be. But when he tried to get answers from his controller, he got a shrug and an “I don’t know what’s causing it. I just report the numbers!” In fact, no one had answers.

Not knowing how his business was actually performing and not getting answers was eating Dean up. Maybe it was just a little mistake somewhere, but Dean couldn’t help but vividly envision his nightmare scenario. Would the bank see something fishy and cut his line of credit? Would the IRS come by for an audit and leave after assessing stiff penalties?

Picture yourself reading financial reports that empower you to make decisions about your business with confidence

Like clockwork, the report comes in at the beginning of the month. With a glance at the numbers, you understand the story of how your business performed last month. They tell the story with utter transparency and clarity, so you can make fact-based, goal-driven decisions about next steps.

Even when the key figures are not exactly where you want them to be, you feel calm and at ease. You know exactly what they mean – and what to do about it. The story that the numbers tell you about last month align closely with your intuition of how it went. Today you can’t help but smile. Last month felt like you had a pedal to the metal sales month, and that’s exactly what the numbers show.

You’re back in control.

Let’s face it: your financials are pretty darn complicated

Tight margins – fluctuating cost of sales – payables – receivables: fast moving parts wherever you look. There’s an awful lot to look at, and no matter where you turn, there seem to be more questions than answers:

  • Your controller is likely to say, “I report numbers, not diagnose problems. Don’t shoot the messenger!”
  • Your CPA is a tax specialist. She’s great at keeping the IRS happy – and heaven knows that’s complicated enough – but your taxes are fine, and she is not equipped to answer strategic business questions
  • Your peer CEO’s are happy to help… to a point. For complicated issues, they recommend getting professional help. But from whom?
  • Your intuition – which is probably right – is that even if other staff members at the company have an idea of what might be wrong, they don’t really know where you can get the answer
  • You could figure all this stuff out by yourself, but let’s be honest: the thought is about as appealing as dinner with your least-favorite person. Every night. You’re supposed to inspire and lead, not mess with details that make you hate your life.

The plain fact is, this is a tough job. But you’re not in business because it’s easy.

Make the numbers make sense, so they actually help you lead

Take a complicated, chaotic thing and make it simple and transparent. Yes, that’s possible:

  • Get super clear on which numbers you actually need to look at and how to interpret them. There is a lot of information you can safely ignore (isn’t that a relief!)
  • Have a system in place for recording and reporting the numbers.
    A system means you don’t have to do it yourself. You get to trust that it’s happening – swiftly, reliably and competently
  • Get a dashboard with key figures.
    We’re talking traffic-light simple. This gives you the clarity to glance over what’s good, keep an eye on potential trouble spots, and take corrective action immediately before danger spots get serious
  • Have a trusted advisor for strategic questions, like if you can hire a new employee, whether you have the right level of cash reserves, and when it’s time to pay off loans.You’re squared away when it comes to legal and tax counsel on specific questions. What you need is someone who’s got your back on strategy. Someone who has been there in the trenches and understands the challenges faced by small and mid-sized manufacturers, distributors, service companies and funded start-ups.

Sound difficult? Well, setting it up is. Unless you’ve got an expert who knows exactly what they’re doing.

Call Patty Lawrence: More management horsepower for your business – when you need it

After Dean called Patty, she gave his staff the financial systems and tools that put Dean back in the driver’s seat. Now when he reviews his numbers, he feels completely in control, because he knows exactly where he needs to focus his attention – and why.

With the financial and operational details safely in the hands of a competent employee working a reliable system, Dean can focus on the bottom line. And, indeed, his gross margin promptly improved 15%.

In the midst of financial chaos, Patty gets things back on track and puts you in the driver’s seat. With more financial management horsepower for your business – when you need it.