Accounting and recording business transactions are the result of long hours spent sitting in front a computer, tabulating, writing and working with numbers. Figures do not lie, and thus it is a common fear among small business owners that financial statements hold them accountable for their actions, as the level of profit generated is directly related to the amount of great management of the company’s resources (employees, employees, employees).
Great management is the art of always looking towards how the business can be improved. Part of making businesses better is anticipating what is evolving in the marketplace and taking corrective action to stay ahead of the curve. The most recent economic recession is a great example of what I am talking about. How many people actually took proactive measures prior to the bankruptcies of Fannie May and and Freddie Mack? How long did it take for business to react after the bankruptcies occurred and the governments began to get involved in bailing out their economies? How different does your business operate today, having experienced the recession now going on a year?
Enter, the accounting profession home to those with a passion for understanding and working with numbers. Some of these very talented people devote their time to keeping ahead of the income tax department. The logical question is “Why are we not using them for this purpose?” For twenty five years of serving the business community as a public accountant, I can honestly say that the clients I really enjoyed working for were those who allowed me to tell them how they were doing financially, and allowed me to assist them in making good business decisions, based on the financial results. While I was augmenting my income tax work with consulting, my counterpart accountants were mailing financial statements to their clients with an invoice.
“Interpret financial statements? Not at the price I am charging.”
The next time your company’s financial statements require preparation, sit down and talk to your accountant about how they can assist you in making key business decisions based on the financial statements they are about to prepare. If they cannot give you the commitment of assisting you in making decisions that will affect your company, change accountants. Your accountant prepares how many financial statements for how many companies within how many industries and possible economic zones? They read financial newspapers and read dry, dry books talking about the economy and talking about business owners, managers and investors. A wealth of information and all you have to do is ask.
For a business to be successful there has to be a partnership comprising the business owner, the accountant, the banker and the insurance agent. The partnership should meet once a year and talk about how the company should proceed into the future. Can you imagine how much more effective your business decisions are going to be having this 
special resource team supporting you?
A couple of years ago, I took this five month leadership course. One week a month we all gathered at a retreat north of San Francisco we experienced many exercises to assist in each of us learning how to be leaders. The overriding theme of most of the exercises was great leaders ask for help. My experience has shown me, when you ask for help, it often times costs many times less than anticipated, particularly when the results of having made great management decisions are matched to the cost.
Don’t accept a cheap price for your financial statements. Demand great business advice!
The Conversation