Companies are being forced to pivot and adapt both internally in how they handle operations and externally in how they interact with customers and maybe even the products they sell as a result of the COVID-19 pandemic.
Virtually no industry has gone untouched with either significant challenges or significant opportunities (or both) during this time. Additionally, the pandemic has forced some companies to look inward and potentially face the process issues they’ve been avoiding for years either due time constraints or due to the being complacent with status quo. One of those areas could be your accounting operations.
Tending to and pivoting your accounting operations not only solves a real-time struggle for you and potentially your staff, but it also sets you up for increased opportunity in the future. Here are some steps to optimizing your accounting operations during this time.
Clean up and project
As the pandemic soldiers on and businesses only operate at limited capacity, business owners should be projecting their financial outlook over the coming months and years. There is no time for waiting it out, and decisions must be made. Anticipating cash flow and redirecting dollars is on everyone’s minds, rightfully so, but you cannot begin to make accurate predictions or good decisions if your financial statements are a mess to begin with.
So, first and foremost, tend to this area. Understand your fixed and variable assets, your breakeven point, and your options for recovering lost revenue during this time, or at very least stop the losing money.
Once your books are in order and you understand how your cash flows in and out, you can begin to project how the next few months and potentially years will play out depending on the changes and choices you make to accounts receivable practices, inventory, fixed expenses, variable expenses, and staffing. This is a time to take back control if you feel like you’ve lost it amid the pandemic.
Digitize and automate
Cleaning up your accounting and projecting for the future becomes a lot easier when your accounting operations are digitized and automated. If you or your staff are working on desktop accounting platforms, now could be the time when cloud-based platforms make sense for your business. Cloud-based software allows anyone (with proper rights and access) to work at anytime from anywhere. This also allows you to make real-time decisions as you have access to your information without needing to be in the office.
Additionally, if you haven’t dived into automation, you don’t know what you could be missing. Cloud-based accounting eliminates paper and transfers the data you need seamlessly to automated platforms so you can process your tasks quickly and efficiently. Automation allows for invoices to be sent and payments made and received electronically, which saves time, energy and resources.
Not to mention, it allows you and your staff to work virtually, providing greater health safety. After making these changes to digitize and automate, you may just realize that the office space necessary prior to the pandemic is now more then you actually need or that you and your staff don’t require office space at all.
Outsource where needed
In times of uncertainty and risk, it may be worth considering outsourcing your accounting functions. This could be to a professional CPA firm that can take the burden of some or all of the accounting processes off your plate while delivering real time results with value-added advice and insight when needed.
Another approach could be to utilize a cloud-based third-party vendor that handles a specific function for your business such as receivables, bill pay or payroll functions. Cloud-based and automated platforms make this easy for you and your outsourced accountant or vendor to share information and data securely, freeing up more time for you to focus on the important income producing aspects of running your business in a crisis and beyond.
Each of the steps above can lead you to the ultimate pivot in your accounting processes — building value. When your books are clean, your projections are as sound as they can be given circumstances, you’re cloud-based and mobile, and you have access to a knowledgeable team to help you make better business decisions, you can begin to build value in your business.
Building value will look different for everyone, but it starts by evaluating and optimizing your internal processes. Where can you be more efficient and effective? What services or products can you drop or enhance to meet changing marketplace demands and unload unnecessary production burdens that don’t translate to revenue? Use the data you have from cleaning up your accounting and tune into the internal workings of your business. You may just uncover opportunities for growth you may have been too busy to see before.
This time presents great challenges, but also opens the doors for great opportunity. Pivoting and optimizing your accounting operations takes an investment of time and energy on the front end, but pays off dividends on the back end in a clearer picture of your business’s health and future opportunities.
Nathan Cacka is a Certified Public Accountant with Cordell, Neher & Company PLLC, a Wenatchee public accounting firm. He may be reached at 663-1661 or firstname.lastname@example.org.