Nothing is more certain in today's world than change. Here is what a noted publication (www.CFO.com) has as advice from recent articles than affects finances of your company:
You Must Have a Unified Accounting (and Finance) System - No matter your company size, you must talk from one set of numbers, and those numbers must talk to the other parts of your accounting - accounts payable, accounts receivable, payroll, inventory, purchasing, fixed assets, cash management, debt management, overhead expenses, financial reporting, etc. Nothing is more confusing than accounting numbers being "different" when taken from "different" reports. Which one is right? Are both wrong?
You Must Have Smart Transactions - What your accountant or CPA needs is not necessarily what YOU need to understand your profitability. Smart transactions allow you to get management information in the form and timing you need it, and not just a number for a tax return. You need Management Reports tailored to information you need, in addition to an accounting report that another third party involved in your business might need. Others may only need the raw number; You must understand "WHY" that number is so.
You Must Integrate Finance and Technology - Technology that delivers simple integration between best-in-class and your line-of-business components. Business systems residing in the "Cloud" now make it easier to integrate accounting and finance at less expense for hardware and software.
More Than Just Profit and Loss Reporting in Arrears - Accounting tends to report what has already happened in the past; finance tends to use accounting info to help predict what will happen in the future. If you only focus on the former, you fail to capitalize on the opportunities of the latter.
Your Ability and Willingness to Grow and Change - It all starts with YOU. The annual budget is static. You must adjust far more frequently. If you are a business owner, the process of rational planning for the future now demands near instantaneous adjustment to the conditions that change tomorrow. The new normal is change and your ability and willingness to adjust near instantaneously.
None of the above is earth shattering business news. But, all these are increasingly complex challenges to any business. You probably have an accounting system or software. But do you realistically have a financial management system that helps you be proactive to the future of change in your marketplace? By the time you file the tax return months later, the financial landscape has probably changed from your customers, and competitors.
Wally Newton is the President and Chief Financial Officer for Prism Financial. He also consults with Landscape Supply, Inc. and other independent businesses. Wally writes articles for the "Landscape Supply Connections Newsletter."
