The goal of accounting is to provide relevant and timely information to the stakeholders and decision-makers to help them run their business more informed and more effective. But more than just providing data, accounting helps interpret what the data means and how it aligns (or maybe doesn’t align) with the company’s overall objectives. Use it to your advantage, and the sky’s the limit for your organization.
A good accounting team will help get you there every time and here’s how:
Analyze the past
Analysis of what happened historically is key to predict what might happen in the future and to move forward, you must know where you came from. Review past trends looking for patterns, previously missed opportunities for improvement and even what you did right. What were some of the driving factors that made it possible? What hurdles stood in the way and what did you do to overcome them? Our accounting consulting firm discovered that by developing KPIs and analyzing them from different angles or varying levels of detail those trends will become more obvious and help to predict where you are going next.
Take charge of the present
Take a look at what is surrounding you today. What is going on that you can influence and change? What are some obstacles standing in your way? Do they relate to past experiences, and if so, how were you able to overcome it previously? Here you can use accounting to create budgets and forecasts to see if you are on track to meet your current goals. How far off or on budget are you? What can you do to address the immediate needs? Timeliness is key. Your financial statements should be presented in a short enough time to allow you to respond in the current month. Assess those KPIs even more to see what happened last month that you can fix now.
Read more: The ABC’s of accounting and finance staffing.
Prepare for your future
Look ahead. Where does your organization want to be in 5 years? 10 years? Those long-term, forward-looking forecasts are critical to future success. While you are looking ahead, utilize your accounting team to help get you there. Accounting can help you plan for major purchases or repairs, help you keep up with sales demands by planning for additional staffing needs and make sure you have enough cash to keep going. Take this time to consider the need for additional outside funding or investments, opportunities to minimize risk and potential tax breaks or saving opportunities.