Standard Operating Procedures

May 9 2019

Avoid Financial Blinders: Outsourced Accounting

Orin Schepps Accounting, Internal Controls, Virtual Accounting accountant, Avoid Financial Blinders, Bookkeeper, Chart of Accounts, financial statements, Gain Experience, nonprofit, not-for-profit, outsourced accounting, Outsourced Accounting Services, risk, Standard Operating Procedures

Avoid Financial Blinders: Gain Experienced Eyes Through Outsourced Accounting.

As head of an outsourced accounting services firm that serves small and medium-sized businesses, my new clients are often amazed by the results of our onboarding process. We usually find a number of gaps in their operations, including accounting errors, inaccurate financial statements and process inefficiencies. I always assure my new clients that no matter how diligent they or their staff thought they were, it’s beneficial to have a second set of more experienced eyes handle this area.

This is particularly important for professional service firms whose skills lie in areas other than accounting, for example, IT, HR, legal and real estate consulting services, not to mention the healthcare field. Let’s say you’re an optometrist: you wouldn’t let an accountant examine and care for your patients’ (or let alone your own) eyes, so why does it make sense for you to handle your practice’s financial operations?

If I’ve struck a chord and you’d like to know more about outsourcing, check out my article: Why Outsourcing Your Accounting Can Be the Next Step to Successful Growth. However, if you plan to continue handling your own bookkeeping and accounting tasks, here’s some advice to avoid mistakes, i.e., financial blinders:

Chart of Accounts: Your Chart of Accounts is the framework within your accounting system that allows you to record your financial activity in a structured and organized way, under the main categories of Assets, Liabilities, Equity, Income and Expenses. If you set up your Chart of Accounts thoughtfully, you can create meaningful financial statements to help inform your business decisions. However, one common mistake I see businesses make is to lump all income into one account. It’s better to identify your major sources of income and create an account for each. For instance, create distinct accounts for fees related to consulting services, each major program and product sales. The same goes for your major expenses. By doing so, you’ll be able to track and assess how profitable each line of business is doing, which is vital to managing your finances.

Standard Operating Procedures (SOPs): SOPs help you avoid errors and facilitate business continuity and efficient processes. A common mistake I see in businesses and not-for-profit organizations is the absence of any type of written procedures for their back-office functions. Without SOPs, it’s much harder to train people, delegate tasks and be comfortable that your financial activity has been processed and recorded accurately and timely. Learn more about the importance of SOPs in my article: Avoid Costly Mistakes by Standardizing Your Accounting Processes. Also, see this Intuit article that describes 21 accounting tasks that should be part of your SOPs.

Reviewing Financial Statements: Your monthly financial statements are a wealth of information – if they are accurate and you know what they are telling you. Even if you have someone on staff who does your bookkeeping and generates your financial statements, you need to understand your financial status and review reports regularly. A common mistake I see is under-utilization of financial information. For example, many business owners and not-for-profit leaders worry about cash flow management but are unfamiliar with their Cash Flow Statement, which is a basic report that can easily be generated from most accounting systems. For more on Cash Flow Statements, I recommend this article from Intuit: Everything You Need to Know About Your Statement of Cash Flows.

Accounting Technology: Today’s accounting technology has removed a tremendous burden from small and medium-sized businesses, allowing owners to streamline processes, strengthen information security and move to a paperless environment. I’ve found that many owners/leaders are not fully aware of the user-friendly, cloud-based accounting applications that can make their lives easier. That’s why outsourcing your accounting function to a reputable firm is beneficial, since it’s the firm’s job to stay on top of the most proven, cost-effective solutions. If you continue to do your accounting in-house, it’s a good idea to invest the time in researching and understanding technology tools that may make your organization the best it can be.

Financial blinders, like the ones above, can occur when you or your internal staff are responsible for things not normally within your core competencies. Hiring a reputable accounting firm enables you to focus on what you do best: taking care of your members, customers and/or clients and growing your business, while leaving the accounting duties to an experienced professional. However, if you aren’t quite ready to make any changes, I hope my advice helps!

Need More Help?
If you have questions and/or would like to learn more about avoiding financial blinders through a second set of experienced eyes, please reach out to me, I’ll be happy to talk with you. Orin Schepps, Founder and CEO @consultanceaccounting https://www.consultancellc.com

October 4 2018

Accounting Firms Can Be Second Set of Eyes

Orin Schepps Accounting, Business Process Reengineering, Internal Controls, Virtual Accounting accounting firm, Accounting Firms, accounting operations, accounting technology, operational efficiencies, professional accountant, Standard Operating Procedures

Accounting Firms Can Be Your Second Set of Eyes

Avoiding Blind Spots: How Accounting Firms Can Be Your Second Set of Eyes

Have you heard the expression, a fish can’t see the water it’s in? Fish are surrounded by water, making them blind to its existence. Likewise, nonprofit executives and business owners can become blind to their everyday situations as well. These blind spots may become an unchanging fact of life that can hurt your organization’s ability to grow and prosper – unless you give yourself the appropriate “nudge” to see outside of your comfort zone.

So, how can you see more clearly? A second set of eyes can help your business or nonprofit operate at its best. When it comes to your back office operations, a review by a reputable Accounting firm can be the difference between a “floundering” and a successful organization.

Why Have Someone Else Involved?
Your business/nonprofit needs to adapt as it matures. At first you may need minimal fine tuning of core workflows as you learn what does and doesn’t work. Later, you’ll likely require a more significant reengineering of your accounting operations and systems as you takes on more clients, customers, members, and/or service and product offerings. You alone may find it hard to see the changes needed because you are too close to the day to day activities and more focused elsewhere. While you keep up with the latest ways to enhance customer/client service, an accounting expert is focused on knowing how innovative accounting technology can improve your back office functions, both in terms of efficiencies as well as security measures. As a second set of eyes, we can work with you to understand steps in your workflows and the value each step brings, culling out outdated and unnecessary procedures which waste time.

What Are the Benefits?
Having a competent, professional accountant can make a big difference to your organization’s success, as he/she can help you:
• Review your Profitability and Gross Margin for opportunities to increase your bottom line
• Identify operational efficiencies through enhanced work flows, saving you time and money and increasing collaboration in your office
• Integrate and automate systems to minimize data entry and errors
• Clarify and streamline your Standard Operating Procedures to help you scale up as you grow
• Identify stronger internal controls to protect your assets and enable more timely and accurate financial information to make better business decisions
• Move to a paperless environment to increase mobility

What Are the Areas Where a Second Look Would Be Helpful?
An example of where a second set of eyes can be extremely valuable is in your use of technology. An accounting technology expert can assess your payables, receivables, payroll and financial management functions to see what’s working well and what can be improved upon. This assessment will include a review of how integrated all of your systems are to achieve maximum efficiency. Given that technology is constantly changing, a regular assessment is prudent; your accounting expert can advise you if there are better solutions out there than your current system(s), and on the best fit for your practice. Accounting technology firms work in this space on a daily basis and have their fingers on the pulse of existing solutions, including hands-on testing of various apps, so they can advise you accordingly.

Having an independent review of your practice can help you realize efficiencies you didn’t know were possible. Become a fish out of water; Open your eyes to new, previously unseen possibilities!

How Consultance Accounting can help: Consultance leverages exceptional talent, proven processes, and top technology platforms to deliver timely & accurate financial solutions that help small and medium-sized organizations improve productivity, increase profitability, and achieve their goals. We use cloud-based technologies that integrate with each other to streamline the process. Contact Us if you have questions and/or need more assistance.