Obtain value from your Accounting department

In many small and medium sized businesses the head of the accounting dept. (let’s call him or her a Controller) is perceived as an overhead, or even a necessary evil and the Controller often then does everything in their power to live up to that perception.  This is exemplified by the Controller’s business associates calling him a bean counter.

It is relatively easy for the owner/President of a business to break this mould by simply asking the Controller a few questions and encouraging them to focus on these answers (not all at the same time) rather than on “counting the beans.”

Each question should be regarded as the starting point of a discussion and an agreement on what the Controller will do to enhance the business in that area.  Like every project there should be appropriate deadlines and resources (if any) assigned. Sometimes it may be appropriate to just have the Controller define a process or project to ascertain what the opportunities are in that area or to be a leader of a team to review the area of opportunity.

1.    What could we do to improve our cash flow?
2.    What improvements should we make to our financial reporting?
3.    What can we do to provide management with better information?
4.    What can we do to improve the use of budgeting?
5.    What three areas would you focus on to improve productivity?
6.    Where can we cut costs?
7.    How can we calculate our cost of sales more accurately?
8.    How can we reduce our foreign exchange exposure?
9.    What can we do to manage risk?
10.    How can we make better use of the staff in the accounting/finance area?
11.    What would you do if you had one extra hour every day?

Many small and medium sized businesses have Controllers who are stuck in a rut, focused on the routine accounting requirements of the business. If the owner does not ask the right questions the Controller will often assume that they are doing what is required of them.  A little encouragement can make a huge change in the value contributed by all the accounting staff and the Controller.

James Phillipson is a Chartered Accountant and a Principal of Mastermind Solutions Inc. with over twenty years experience in large and small businesses.  He has provided financial counselling to his clients since 1996, often in the role of or as a coach to a Controller or Chief Financial Officer.  James has experience in financial roles in a wide variety of businesses and industries.