Over the past few years, I’ve frequently talked about companies that don’t produce enough financial information.
Today I want to tell you about a company that produced too much…
…which is its own kind of nightmare!
When a company hits £1 million or £2 million turnover, producing monthly management accounts is normal.
This company produced the same level of financial information every single day.
That meant that the four people in the finance department had to chase other people in the business for information daily. They then turned it all into a giant report.
It was outrageous… overblown… completely unnecessary…
The only reason they were doing these calculations daily was that years ago, some bright spark decided to do it – and no one ever questioned their judgement.
The kicker? No one ever saw the output.
As far as I could tell when we were brought in to replace this broken department, those reports simply vanished into thin air.
So, on the surface, you have an accounting department that looks like it’s working incredibly hard and producing a lot of value.
In reality, they weren’t producing anything that helped the company at all.
And that should be a key requirement of every finance function.
So were the salaries and money spent on this dept worth it? Emphatically no. (Which is the conclusion the CEO eventually reached as well…)
Now, it’s unlikely that your accountants are making the same mistake. As I said, the problem is usually the opposite – you don’t have enough of the financial information you need to run your company smoothly.
Still, it raises an important question: Is your accounting team giving you value-for-money?
Is their work actually worthwhile?
Are they just pushing numbers around on a spreadsheet…
…or are they giving you the information you need to grow your company – and doing so at a reasonable cost?
It’s even more important than usual to ask this question right now…
…because so many companies are busy cost-cutting because of the Coronavirus situation and the troubled economy.
But while of course controlling costs is essential, it’s a mistake to look at “cost” by itself, without considering “cost-effectiveness”.
There is simply no point paying less for a service that’s going to leave you unsatisfied and make it harder for your business to function.
In the long-run, that will cost you a lot more!
And there’s also no point continuing to pay a fortune for a service you think you need, unless your money is well-spent.
So right now, while you’re rethinking your expenses, it’s the right time to ask: “Is our accounting solution worth the money we’re spending on it?
“Or could we spend that money in a more sensible way, so that the information our accountants give us actually helps us move forward?”
If you think there’s room for improvement, get in touch with me today.
Our Outsourced Finance Department isn’t the cheapest finance solution out there.
But it’s designed to give you the kind of world-class financial management that a corporate would take for granted, even when you’re much smaller.
In other words, you will get incredible value-for-money.
Your finance department will run with unparalleled efficiency. (We come with turnkey financial systems and processes that will start working for you on Day 1).
You’ll never have to worry again about whether your numbers are accurate, whether invoices have been processed on time or worry whether there’s a big tax bill you haven’t anticipated. It will all be in hand.
You’ll have all the information you need to run your company smoothly – including monthly management accounts and regular cashflow reports, presented in a way which you can understand even with no financial background.
And you’ll have the support of our financial experts, who will work with you personally to help you make the best financial decisions for your future.
This is for you if you’ve stopped seeing accounting as something your company simply “has” to do…
…and are keen for your financial team to add value to your company, helping you grow much faster.
Just hit ‘reply’ to this email or call us today on 01279 647 447 to find out more about how we can help you do just that.
Warmly,
Garry
