There are plenty of parts of every business that are “cost centers.” That means they’re an expense on the budget, but they don’t generate any revenue. Human Resources and your maintenance staff, for example, provide essential services, but they don’t make sales.
Too often business owners think of accounting and business services as little more than just another cost center – sure, they collect the revenue, pay the bills, and deal with the taxes every spring, but where’s the money-making potential in that?
That’s where many business owners go wrong.
Your accounting team should be so much more than an entry on your expense line. Strategic and skillful accountants can be an active partner in driving revenue and managing costs, just as surely as your front-line sales and marketing staff.
How can that be? Think of your accounting team as a year-round, proactive, financial partner. Excellent customer service, as part of their Accounts Receivable collection management, along with supporting your sales team and helping them focus their sales efforts, deliver positive impact on sales revenues.
Your accounting team knows your numbers better than anyone else. They can help realize your financial goals and build a sustainable growth plan.
Get your accountants involved at every stage of the process, including product development, forecasting and budgeting, inventory and receivables, long-term business planning and tax strategy.
Think about taxes. Usually, you just hand your receipts off to the accountants after the first of the year and wait for the unpleasant surprise when the tax bill arrives.
It doesn’t have to be this way. By weaving your accounting team into the process from the start, you can be prepared, setting aside cash to meet the tax bill, or more importantly, knowing whether certain decisions or actions can be taken to optimize your tax situation while also enhancing your business’s operations. For example, will certain capital investment or charitable donations have a positive effect on your taxes at the end of the year.
Now think about your pricing and capital flow, particularly if you’re in a business with a long production cycle and a heavy capital investment, such as wine production. Your accounting team can help you collect and analyze detailed data, such as cost-per-bottle, and manage your use of capital in a production process that can last three or more years from harvest to sale.
And what about day-to-day operations? If you’re that winery owner, you have vast amounts of money tied up in the long-term production process and probably don’t have a lot of cash to spare. Your accounting team can help with aggressive hands-on management of expenses, accounts receivable, and accounts payable that will maximize your precious cash on hand.
So how does this make accounting a revenue driver rather than a cost center? Every one of these strategic services saves you money, and that goes right to your bottom line. They don’t just save you money either. The kind of data and strategic insight that a good accounting team brings to the table makes it possible for you to make smart pricing decisions that pay off for your sales staff in the field.
How to use your accounting team is one of the most important decisions a business owner can make. If you realize they’re far more than just another cost center, but rather a strategic financial partner in every phase of the business, then the results will show on your top and bottom lines.
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