The Business Checkup2 min read
The first thing to compare is the speed of reports. For a large business, information must be collected, sorted, and analyzed from many branches and departments. Getting those reports as soon as possible has always been the goal of the large-business experts, as opportunities and risks often occur quickly, and the business must respond to each swiftly to survive and thrive.
The small business owner has a great advantage in this area. Instead of investing thousands in complex accounting, customer relations, and operations software, the small business owner can choose from one of hundreds of simpler options to track their business. Whether the business is a small service company, local restaurant, or one of the many gig-economy workers operating a single-person business, there is a solid off-the-shelf solution readily available.
The second thing to compare is the type of reports. What information is needed to track a business to guarantee its success? This is where the experts step in. A large business will have an in-house team of accountants and business strategy experts who design the systems which collect the information as well as reading the reports generated.
It is possible for the small business owner to obtain similar reports. Most off-the-shelf accounting options for the small business owner have multiple ways to identify data inputs. Careful customization of these accounting systems can allow the small business owner to obtain two kinds of reports:
- Financial Reports – Financial reports are standardized across all business, and the templates are included in all respectable accounting systems. These are the reports that are delivered to interested parties outside of the business, such as banks and vendors. Through financial business reports, a business owner can prove their ability to pay loans and their continuing business health. Accountants can deliver financial reports with a range of in-depth verification, from reviewed to compiled to fully audited.
- Management Reports – Management reports are customized for each business, delivering information about the business to interested parties inside of the business. Due to the unique needs of each industry and business, the greatest return on investment for a business can be to consult an expert to create effective management reports from within an off-the-shelf accounting system. These experts are readily found at accounting firms specializing in controllership services and outsourced CFO services.
The small business owner, if not a skilled accountant themselves, is advised to seek outsourced help in the setup and maintenance of an accounting system. The accountant can help identify and track the key performance indicators (KPIs) which let the owner know if their business is truly thriving or is merely getting by. Once a system is set-up, periodic check-ups to fine-tune that system will give the business owner a system to check on the health of the business that is limited only by the timeliness and accuracy of data entry.
Off-the-shelf accounting systems offer default accounting systems, which may work for a business just starting out. To maximize the effectiveness of the system, an accountant can modify these defaults to specifically track the information that the business owner needs to see as often as possible. By consulting with an accountant, the small business owner can identify opportunities and risks in the same way that larger businesses can, but with the care and passion that can only come from a small business owner.
This year, as business owners prepare for their annual check-in with their accountants for tax season, it’s a good idea to set aside some time to talk about the overall health and condition of the business accounting system. Use that time to ask the expert if there is a better system to use, or how to get the most useful information from the system that they have.
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