The Importance of Establishing Sound Accounting Practices Before Your Company's Growth
Recently, in practice, we saw first-hand a company feel the consequences of not having the proper accounting practices, policies, procedures, and function in place before they experienced rapid growth.
Overnight, this company’s order volume quintupled due to a quick change in consumer behavior. Orders were pouring in, and they could not keep up from a record keeping standpoint. Ultimately, their financial records were extremely inaccurate, and they had to incur significant advisor costs to play catch-up.
3 reasons your company needs sound accounting practices in place before you experience any type of growth:
Constant Financial Visibility into Your Business
When your company experiences any level of growth, it can be an exciting time; however, in order to sustain that growth, management must have accurate financials and analytic reports to make informed decisions in real-time. This financial visibility is often what separates the best companies from the rest of the pack.
Automation & Connected Systems Save Time & Money
Decades ago, the accounting component of businesses was strictly a manual process. Today, we still see clients and businesses manually doing key accounting processes that have been automated for years.
Having automated processes and connected software systems within your accounting department and company gives business owners countless hours back during the day. Those hours can be used to focus on the business instead of fixing something that went haywire.
Be Transaction Ready
After a significant and sustained growth period, business owners tend to explore what they could sell for in the open market. One key component of your valuation is the strength of your accounting department and its processes. Buyers appreciate seeing growth; however, they are also as interested in your accounting department’s ability to produce timely and accurate financials, create a budget and a forecast, and integrate with their current accounting and finance function. Don’t let this part of your business be the reason a buyer ‘passes’ on your company.
If you would like to see how ready your business’ accounting function is to meet the demands of expected or unexpected company growth, please schedule a free consultation via email (email@example.com) or by scheduling a call directly on our website homepage.