How to Hire a CFO Superstar

Posted on by Randy Stemmer

How to Hire a Chief Financial Officer SuperstarHiring a Chief Financial Officer (CFO) is one of the most important decisions a business owner can make for the company.

The best time to hire a CFO is when the company needs help with accounting, finance, tax, audit and long-term strategic planning on an ongoing basis.  This can be evidenced by fast revenue growth, outside audit requirements, mergers, acquisitions or a plan to take the organization public.  The largest telltale sign is when accurate financial information is not being prepared timely to support key business decisions.

There are five critical skills every CFO must master to be effective.  They are the ability to be a trusted advisor, a high level of accounting and finance expertise; deep industry experience; strong communication and presentation skills as well as substantial strategic planning acumen.

Trusted Advisor

A CFO must be a trusted advisor to your senior management team.  The person should be an integral part of strategic planning and be able to communicate well with managers on achieving very high levels of operating efficiencies within their departments.

Accounting and Finance Expertise

Anyone you are considering should have a thorough knowledge of accounting and finance principles.  They should hold at least a Certified Public Accountant (CPA), Certified Management Accountant (CMA) or a Master of Business Administration (MBA) designation preferably with a rigorous emphasis in accounting and finance.

While a Controller looks at past financial performance, the CFO makes sure the correct systems, processes and people are in place to fulfill the company’s future goals.

Industry Experience

Experience in your industry is paramount.  The more experienced CFOs become the more they tend to specialize in specific industries.  Make sure the person you hire is well versed in your line of business.  This kind of person will already be familiar with important issues regarding your business. Consequently, they can get up to speed quickly and can bring a fresh and innovative perspective to the position.

Communication and Presentation Skills

Chief Financial Officers communicate directly with people in the company’s stakeholder community. This includes bankers, auditors, vendors, major customers, shareholders and Board members.  They must be very effective communicators that are positive and professional at all times.

Strategic Planning Acumen

If your company is experiencing rapid growth, it is critical that you hire a CFO who has experience in this type of fast moving environment.  You do not want to hire someone that is knowledgeable only at the level of business you are producing right now.  You must hire someone who can clearly see where your business needs to be in the next three to five years.

How We Can Help You

Pacific Crest Group (PCG) can provide your organization with an interim CFO until you are ready to hire a full-time Chief Financial Officer.  A part-time CFO will help you build the financial systems and strategies you need for a smooth transition to a permanent position.  PCG’s Bay Area CFO Services and Hiring a CFO: What You Need to Know are two great resources to help you make the right hiring decision the first time.  

Pacific Crest Group (PCG) provides professional services that keep your business focused on your critical objectives.  We provide strategic Accounting and Human Resource (HR) services created specifically to help you meet your goals. Through exemplary customer service, clearly defined policies and procedures as well as a forward-looking perspective, we provide the outsourced solutions your business needs to grow. A PCG professional is happy to meet with you to discuss solutions for your unique requirements designed to maximize all of your business opportunities.

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Recruiting Employees Based on Cultural Fit

Posted on by Randy Stemmer

Recruiting Employees Based on Cultural FitA company’s culture includes all its policies, guidelines, systems and processes as well as shared beliefs, attitudes, common practices, experiences and actions that demonstrate its values. The most important part of company culture is what the business owners, managers and employees understand the consequences of specific behaviors will be whether they are agreed upon in advance or not.

You can clearly define your organization’s culture by observing your employees interactions with each other, management and your clients. Culture is the primary factor in a company’s long-term success. It is one of the main assets of a company that remains stable and consistent in the face of constant change. Recruiting employees based on an organization’s culture is known as hiring for a cultural fit.

What is Cultural Fit?

Cultural fit means an employee’s values, beliefs and behaviors are in alignment with the employer’s values, company culture and long-term goals. A survey of top employers found that eighty percent of managers named cultural fit as one of their top priorities when they hire new staff.

Identify the best reasons why a candidate should choose to work for your company and those will be the distinguishing elements of a good cultural fit. Interviewers should model those attributes throughout the entire hiring process.

Recruiting Based on Cultural Fit

The process starts with recruitment. Emphasizing a good cultural fit must be the goal from the beginning to the end of the hiring process for both the employer and the prospective employee. It is very important that candidates share this goal with the recruiter to achieve the maximum benefit for both.

Actively managing and developing cultural fit throughout the hiring process can significantly improve employee performance, profitability, company growth and ultimately employee retention.

The study “Built to Last” by James Collins and Jerry Porras describes the characteristics of eighteen US companies that remained at the top of each of their industries for more than fifty years. Those organizations placed a large emphasis on hiring, developing and managing employees based on the cultural fit each business wanted to achieve.

The businesses actively promoted the elements of their culture to the candidates they wanted to attract. The employees thrived in their environments and the company enjoyed their longest employee retention periods.

Recruiting based on cultural fit makes hiring the right candidates for your company much easier. The people you hire today will drive the future of your organization tomorrow. Using cultural fit as a recruiting tool, allows you to showcase your culture as a benefit to prospective employees so their expectations are in alignment with your business goals from the very beginning. This is a win-win for both the employer and the new employee.

Cultural Fit Examples

Pacific Crest Group’s (PCG) Human Resources and Employee Development Services provides examples on how using cultural fit as a powerful and motivating process will help you hire employees that will thrive in their roles, drive success for your organization and save you time and money from making costly hiring mistakes.

How We Can Help You

Pacific Crest Group provides professional services that keep your business focused on your critical objectives. We provide strategic Accounting and Human Resource (HR) services created specifically to help you meet your goals. Through exemplary customer service, clearly defined policies and procedures as well as a forward looking perspective, we provide the outsourced solutions your business needs to grow. A PCG professional is happy to meet with you to discuss solutions for your unique requirements designed to maximize all of your business opportunities.

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What is the Ultimate Role of Accounting?

Posted on by Randy Stemmer

What is the Ultimate Role of AccountingAccording to the Stanford Graduate School of Business, “The role of accounting…is to provide a common language and a consistent set of reporting rules that everybody understands in the same way. The market has come to rely on accountants as the keepers of economic history” and as a basis for determining the market value of a business.

Predict Company Earnings   

The most important component of a company’s market value is based on the expectations of its future earnings.  Accounting reports should provide investors and other interested parties reliable information they can use to make their own forecasts of future earnings growth. Yet, ironically, the number of complaints filed against businesses because of overvaluations as a result of internal control weaknesses has been significantly higher than in previous years.  What can be done about this problem?

Strengthen Internal Controls

It is critical that you test for risks and weaknesses in your procedures in advance.  Isolate flaws and work on implementing improvements right away.  If cash flow is a problem, look for delays in billing cycles, ineffective payment terms or chronic late paying customers.

Institute Checks and Balances

Make sure you have documented checks and balances for each accounting process.  Do not have the same person perform multiple accounting functions that are not reviewed by at least one or more other professionals.  The mere fact that each step may be checked by an independent and objective party can be a huge deterrent to potentially fraudulent behavior.

Follow-up on Customer Complaints

Follow up on any complaints from customers, vendors and financial service providers regarding inefficient accounting policies or procedures immediately.  These can be early warning signals to big problems looming in the future.

Control Access Rights

Most accounting software programs give its users the ability to edit and delete previous transactions which could lead to easy concealment of misappropriation of funds. Business owners should retain global access to the company’s accounting system and restrict user access to only the areas necessary for specific functions. A review of voided and deleted transactions will show any adjustments or deletions and can be instrumental in exposing irregularities.

Understand Your Financial Statements

Business owners should review financial reports and understand the trend and changes in their financial data. Focus on understanding month to month and year to year variances between budget and actual amounts.

Schedule Regular Third Party Reviews  

Internal controls with independent and objective third party reviews are critical. You should have an accounting professional diligently review bank statements, check registers, bank reconciliations and payroll records regularly.  These steps are best performed by one of Pacific Crest Group’s Outsourced Chief Financial Officers because they have years of experience in this area.

Pacific Crest Group provides professional services that keep your business focused on your critical objectives.  We provide strategic Accounting and Human Resource (HR) services created specifically to help you meet your goals. Through exemplary customer service, clearly defined policies and procedures as well as a forward looking perspective, we provide the outsourced solutions your business needs to grow. A PCG professional is happy to meet with you to discuss solutions for your unique requirements designed to maximize all of your business opportunities.

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Zenefits: Lessons Learned from Putting Growth above Integrity

Posted on by Randy Stemmer

Zenefits: Lessons Learned from Putting Growth above IntegrityWho is Zenefits?

Zenefits is a company that provides an employee benefits software program designed to manage onboarding, timecards, payroll, benefits and other administrative tasks.  It interfaces with other Human Resource (HR) providers so employee changes can be updated in one system.  The program is managed via the cloud through a dashboard and provides HR metrics for measuring employee performance.

Their software is provided for “free” in exchange for allowing Zenefits to become your “broker of record.”  This allows Zenefits to be paid commissions and to compete directly with Insurance Brokers.  The market is estimated to be worth about eighteen billion dollars annually.

Zenefits claims their mission is to disrupt and transform the Human Resources (HR) industry by promising to reduce the amount of administrative drudgery associated with Human Resource functions. Its goal is to bring the benefits of technology to a highly regulated and purportedly slow moving industry.

What Happened to Zenefits?

Zenefit’s expansion plans came to a screeching stop in the wake of a rising number of complaints.  The company spun out of control when it put growth above integrity.  The following allegations and lawsuits are now public information:

  • It has been alleged Zenefits was using unlicensed brokers to sell insurance in at least seven states.
  • The organization was charged with developing software to make it appear that brokers had completed a fifty-two-hour online training course required to do business in California when they had not actually completed the work.
  • ADP blocked Zenefits from its “RUN” payroll system due to security concerns regarding properly protecting personal identifying information such as social security numbers.
  • The company admitted it could not keep track of the personal paid time off of its own workers. Many former employees filed claims for unpaid wages.
  • It may have misclassified non-exempt employees as exempt employees to avoid paying overtime and providing required breaks. Zenefits began to reclassify its workforce and experienced high and costly turnover.
  • Questions arose over the clarity, completeness and legality of its employee handbook.
  • If found guilty of violating consumer protection laws, state regulators could revoke Zenefit’s insurance licenses.

Co-founder Parker Conrad stepped down as CEO and was removed from the Board of Directors.  It was reported later that Sam Bond, VP of Sales, left the company shortly thereafter.

Legal Compliance is always Priority Number One!

Human Resource services are more about the employer and employee experience than technology.  Technology without a well-defined purpose increases the number and severity of system breakdowns. 

Innovation and creativity are never substitutes for maintaining the trust of your employees and customers.  Laws are in place to protect the consumer.  Being an “industry disrupter” does not mean you can ignore complying with the law.

Zenefits discovered a real customer need.  Business owners find insurance confusing.  They want to spend their time building their business not completing HR administrative tasks.  They want technology to help them save time and to operate more efficiently.

Pacific Crest Group’s (PCG) strength rests firmly in our commitment to the communities where we live and do business.  Our Human Resources and Employee Development Services provide expertise in a multitude of areas that streamline payroll and benefit processes in a clear and measurable way.  PCG’s services enhance compliance, performance management, employee development and succession planning systems.

Our innovative programs drive value by creating a purposeful and rewarding work culture for both employers and their employees.  PCG does not require clients to purchase a specific system but rather helps clients find and implement systems and platforms that meet their unique, individual business needs.

How We Can Help You

Pacific Crest Group provides professional services that keep your business focused on your critical objectives.  We provide strategic Accounting and Human Resource (HR) services created specifically to help you meet your goals. Through exemplary customer service, clearly defined policies and procedures as well as a forward-looking perspective, we provide the outsourced solutions your business needs to grow. A PCG professional is happy to meet with you to discuss solutions for your unique requirements designed to maximize all your business opportunities.

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Superior Employee Benefit Programs Drive Increased Financial Performance

Posted on by Randy Stemmer

Superior Employee Benefit Programs Drive Increased Financial PerformanceThe percentage of employees with a retirement plan from their employer has been dropping sharply according to the Employee Benefit Research Institute (EBRI).   An article in the Harvard Business Review on “Managing People,” stated seventy percent of the employees surveyed stipulated they want better employee benefit packages from their employers.  The retention of top-notch talent is getting increasingly more difficult in the current economic climate because the demand for quality employees substantially exceeds the supply available.

There is a solution to the apparent paradox of employers cutting back on offering employee benefit packages in the face of an ever-growing number of  employees who are looking to jump ship for a better offer.  The answer lies in the fact that there has been a massive paradigm shift in the benefits arena over the last several years.

Strategic Shift in Employer-Provided Benefit Packages 

Employers have moved away from a strictly paternalistic model that focuses on “looking after your employees” to an approach where the purpose of offering benefits is to assist the business improve its financial performance.

The debate is centered on two different management assumptions.  One assumption is that employee benefit reductions increase profitability.   The other assumption is that the employee and employer relationship is to be cultivated and nurtured.

Based on results, cultivating the employee and employer relationship provides the best results.  This is because increasing the financial health of the organization is in the best interest of everyone in the company.  The process aligns your employees’ performance with your company’s long-term goals.  Your employer provided benefits package serves as an incentive for your employees to stay with your organization allowing it to continue to grow.

Increased Employee Loyalty

Pacific Crest Group’s (PCG) Human Resources and Employee Development Services are a huge advocate for fair and equal treatment of employees.  PCG provides systems that encourage your employees to make a strong commitment to the profitability of your business for all concerned.

Pacific Crest Group knows companies must hire people who are the most qualified for the job.  Once you have them, you want to keep them for as long as possible.  Employee benefits should focus on your employees’ emotional needs not just their financial requirements in order for them to stay with your firm over the long haul.  It is imperative that you give them plenty of reasons to remain loyal to your organization.

How We Can Help You

Pacific Crest Group (PCG) provides professional services that keep your business focused on your critical objectives.  We provide strategic Accounting and Human Resource (HR) services created specifically to help you meet your goals. Through exemplary customer service, clearly defined policies and procedures as well as a forward-looking perspective, we provide the outsourced solutions your business needs to grow. A PCG professional is happy to meet with you to discuss solutions for your unique requirements designed to maximize all your business opportunities.

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New Revenue Recognition Standards Have Been Released

Posted on by Randy Stemmer

New Revenue Recognition Standards Have Been ReleasedThe Financial Accounting Standards Board (FASB) released new Revenue Recognition Regulations that must be complied with by all private and public companies in all industries by 2017.  The changes are wide sweeping to say the least.  For many business owners, the new standards are overwhelming.

Five Step Reporting Process

The new five-step process for revenue recognition is as follows:

1)    Identify the contract with the customer.

2)    Identify the performance obligations (promises) in the contract.

3)    Determine the transaction price.

4)    Allocate the transaction price to the performance obligations in the contract.

5)    Recognize revenue as the reporting organization satisfies a performance obligation.

Application Illustration

A very simplified example of an application of the revenue recognition standard for a service business would be in the case where a Business Consulting firm had a three-year contract with a medical firm.  This example is provided for illustration purposes and is not to be considered accounting or legal advice.

Assume the Business Consulting firm contract specified that in the first year the Business Consultant would provide recommendations for increasing the medical firm’s revenue by ten percent for a fee of $48,000 payable in twelve monthly payments of $4,000.  The second year the Business Consulting firm would install software that would track the required revenue growth for $50,000.

Information Required

Organizations will be required to capture information from all sales contracts related to revenue with a customer.  Revenue recognition is always fluid. This is particularly true when agreement terms are updated or new performance requirements are added to the contract.

There is a technical accounting assessment that must be completed in advance of implementing any part of a proposed compliance solution.  It is imperative the intricate standards be fully understood before any accounting software system changes are attempted.  Potential parallel reporting requirements and impacts should be analyzed fully before proceeding with any implementation methodology.

It can take six to twelve months for a professional trained in the application of the standards to get a business to the point where it has a working knowledge of the complex rules.  Businesses must start preparing for the vast reporting requirements right now.  Early adoption is not only recommended, it is critical for successful compliance.

Collaboration Is Vital

The best way to prepare for the new standard should be iterative and dynamic as opposed to sudden and static.  Excellent teamwork and collaboration will be required throughout all departments including Strategic Planning, Accounting, Finance and Human Resources (HR).  Teams should be co-located as much a possible with regular and consistent communication channels in place to organize and share all the required data.

Hire an Interim CFO

One of the best ways to create and install the required compliance system is to hire an interim Chief Financial Officer (CFO) who is trained in the stringent reporting requirements.  The CFO can set the initial course of the initiative, keep it on course and plan for future compliance.

Having an independent professional involved from the beginning gives that person the objectivity they need to gain insights that normally are not available from within the organization.  The financial expert comes in, completes the job and then supports the accounting department with any ongoing maintenance work that might be required.  Pacific Crest Group’s outsourced CFOs are fully trained for this purpose.

How We Can Help You

Pacific Crest Group (PCG) provides professional services that keep your business focused on your critical objectives.  We provide strategic Accounting and Human Resource (HR) services created specifically to help you meet your goals. Through exemplary customer service, clearly defined policies and procedures as well as a forward-looking perspective, we provide the outsourced solutions your business needs to grow. A PCG professional is happy to meet with you to discuss solutions for your unique requirements designed to maximize all of your business opportunities.

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Four Motivators Increase Employee Engagement

Posted on by Randy Stemmer

Four Motivators that Increase Employee Engagement

A high level of employee engagement generates longer retention, exceptional morale, strong loyalty, increased productivity and heightened profitability. It is very difficult to motivate employees without a consistent system in place.  The four cornerstones of increasing employee engagement are aligned goals, meaningful work, challenging assignments and employee recognition.

Aligned Goals

Research shows that an employee’s relationship with his or her direct manager is the single most important factor to drive employee engagement.  The extent that management is able to communicate the importance of aligning employees’ goals with the overall objectives of the company is critical to the success of their working relationship.  It is imperative that every employee understands how their work supports the company’s vision and mission statements.

Meaningful Work

Managers must individualize work assignments with each employee’s strengths, interests, career aspirations and personal development goals in mind.   What makes work meaningful to workers is understanding the impact it has on the company’s customers.  When employees believe their work improves customers’ lives, they are inspired to do their best and a sense of accomplishment permeates the team culture.  This deepens the importance of the work each employee provides to the business overall.

Challenging Assignments

Businesses need the maximum contribution from all their employees.  A mutually beneficial work relationship builds trust and helps teams adapt to changing priorities.  Being flexible and agile in the face of constant change in a global economy is paramount in increasing profitability.

Employees want work that builds on their natural abilities.  Managers must be willing to assign challenging work to all the members of their team in order to increase their skill levels.  Workers who believe their manager is there to help them are motivated to do their best work.  Authentic, small action steps can make a big difference in increasing their confidence.  Employees want to feel highly valued.

Employee Recognition

Seventy-eight percent of employees cited recognition as the main motivating factor in their careers.  Pacific Crest Group’s (PCG) Human Resources and Employee Development Services provide numerous strategies for building strong relationships between business owners and their workers. PCG case studies document how employees perform best when they feel the company they work for cares about them and is willing to listen as well as implement their ideas.  Investing in your employees’ success clearly yields the highest return over the long-term.

How We Can Help You

Pacific Crest Group provides professional services that keep your business focused on your critical objectives.  We provide strategic Accounting and Human Resource (HR) services created specifically to help you meet your goals. Through exemplary customer service, clearly defined policies and procedures as well as a forward-looking perspective, we provide the outsourced solutions that your business needs to grow. A PCG professional is happy to meet with you to discuss solutions for your unique requirements designed to maximize all of your business opportunities.

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Cash Flow Acceleration is Critical to Profitability

Posted on by Randy Stemmer

Cash Flow Acceleration is Critical to ProfitabilityOne of the most important ways a Chief Financial Officer (CFO) can make their company more profitable is by accelerating cash flows. The following six strategies are just a sampling of some of the techniques used by many CFOs today.

Prepare a Cash Budget

Prepare a monthly cash budget with weekly forecasts to track actual cash against projections.  This tool will enable you to better control where your money is going when and help you prioritize future expenditures.

Require a Down Payment

Sellers can reduce their nonpayment risks by not accepting large orders from unproven customers without doing a full credit check.  Talk with the prospective customer’s current suppliers to see what their payment history has been.

Business owners can take command of their collections by requiring a down payment before buying supplies or starting work on large orders.  If you feel there is too much risk, offer the buyer a smaller supply with the provision that larger supplies will be provided when full payment has been received on their previous order.

Consolidate Purchasing

Centralize purchasing for your firm within major profit and loss centers.  This process reduces administrative costs.  Standardized purchasing policies and procedures promote efficiency by preventing duplication of efforts.  When negotiating with your vendors, agree on the price of the goods and services first then negotiate the best payment terms you can get to save cash.

Utilize Multiple Suppliers

Prevent costly supply disruptions which can bring sales and cash flow to a full stop.  Use multiple suppliers for critical items whenever possible.  Know your suppliers’ financial status so you can alleviate potential disruptions before they happen.

Turn Inventory into Fast Cash

Turn slow moving inventory into cash by discounting it to move quickly or by returning it to the vendor.  Record and document any damaged inventory right away.  This can save cash if the damaged merchandise was not sold.  Unsold inventory can be written off as a loss for income tax purposes.

Focus on Return on Investment (ROI)

The link between your invoicing and cash flow is paramount.  Streamlining your accounting system to make sure you can measure the profit on each item sold and each service rendered is critical.  This makes it easier to measure your ROI and makes your customers happier because you are more efficient in your operations.

Pacific Crest Group’s Key Performance Indicator Guideline defines frequently used metrics and how to use them.  It provides a case study, sample forms and charts for your use.  Pacific Crest Group’s Chief Financial Officer (CFO) services provide explanations on how interim CFOs can help you.

Pacific Crest Group provides professional services that keep your business focused on your critical objectives.  We provide strategic Accounting and Human Resource (HR) services created specifically to help you meet your goals. Through exemplary customer service, clearly defined policies and procedures as well as a forward-looking perspective, we provide the outsourced solutions your business needs to grow. A PCG professional is happy to meet with you to discuss solutions for your unique requirements designed to maximize all of your business opportunities.

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Using Cost Accounting to Measure Profit Margins in Personal Service Businesses

Posted on by Randy Stemmer

Using Cost Accounting to Measure Profit Margins in Personal Service BusinessesCost Accounting is the process of collecting, analyzing, recording and summarizing data to be used in evaluating various courses of action.  It is an excellent tool to be used by personal service businesses to measure their profit margins.

Cost Accounting Systems Allow a Business Owner to Maximize Operating Efficiencies

Cost accounting systems involve the recording and matching of all the costs and revenues in a business process in order to measure its profitability.  The system must provide the detailed cost information management needs to control operations and plan for the future in different work environments.

The most effective cost accounting systems are the type that track the costs of producing a service, predict cost behaviors and set prices.

Calculating the Full Cost of Producing a Service

A good method to compute the cost of each unique service rendered is called Activity Based Costing (ABC).  This approach is based on analyzing the costs of materials and labor as well as allocating overhead based on the specific activities performed to produce a specific service.

Predicting Cost Behaviors

Management must have reliable knowledge about how costs will “behave” at different levels of operations.  If production increases, will costs go up, down or remain the same?  Once the behavior of costs is known, the ability to make accurate cost predictions is significantly improved.

Setting Prices

Prices are set in competitive markets by the laws of supply and demand.  If a company generates a service that is unique, designed to meet specific customer requirements or is protected by intellectual property laws like a copyright or patent, the business can charge substantially more for this type of service.

Which System is Best for Your Business? 

Pacific Crest Group (PCG) answers this question in the posting “Accounting Challenge for a Local Professional Services Company.” PCG designed and implemented a new time and expense tracking system to account for the costs of projects in process and thereby measure the resulting profit.  It also created a uniquely integrated invoicing system to simplify billing.  The system allowed senior management to focus on sales, client service and expanding the business rather than being consumed in the details of managing the production of a specific service.

Pacific Crest Group provides professional services that keep your business focused on your critical objectives.  We provide strategic Accounting and Human Resource (HR) services created specifically to help you meet your goals. Through exemplary customer service, clearly defined policies and procedures as well as a forward looking perspective, we provide the outsourced solutions your business needs to grow. A PCG professional is happy to meet with you to discuss solutions for your unique requirements designed to maximize all of your business opportunities.

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Are You Getting too Many Financial Data Points too Often?

Posted on by Randy Stemmer

Are You Getting too Many Financial Data Points too OftenOnly thirty six percent of business owners say “they can easily ensure consistent, quality decisions at all organizational levels” and a staggering eighty-nine percent said “a stronger partnership with finance in decision-making would help them better manage their organizations in the future.”   Chartered Institute of Management Accountants’ Chief Executive Officer Charles Tilley reported “We work with a range of organizations across the world and can see that decision-making is becoming more and more difficult as complex information flows so much faster.  Too often, impulse substitutes for insight….We need a dramatic improvement in the way decisions are made at all levels (Global Management Accounting Principles Seek to Guide Better Benchmarking, Decision-making,” Journal of Accountancy).”

Management Accounting Principles Allow You to Make the Best Decisions

Management Accounting Principles are a combination of clear standards, robust processes and well-managed performance metrics. They create effective management accounting functions that support your strategic decision making systems and yield efficient operations.  Some of the critical questions underlying these successful principles are:

  • Is the process necessary?
  • Can it be eliminated?
  • Can it be automated?
  • Who is using the output?
  • How often is the output used and for what purpose?
  • Does the process add value?
  • What roles and responsibilities does the decision process require?  Are they clearly defined?
  • Are there routine “fire drills” created by a specific process?  If so, how are they caused and how frequently do they occur?

Here is How You Can Improve Your Business

The key is to challenge every step, every piece of paper, every input and output for effectiveness.  Here is a very powerful way to discover opportunities for improvement:

Conduct Process Walk-Throughs: Meet with all the people involved in the process to gain an understanding of how their work gets done.

Use Best Practices:  Implement industry accounting best practices to improve accuracy, response time, data quality, employee performance and compliance with Federal, state and local laws.

Create Process Metrics: Develop and analyze Key Performance Indicators (KPI) to measure your productivity, efficiency and effectiveness against industry standards.

Reward Success: Have milestones along the way to acknowledge people who have performed well especially if their contributions have improved the decision making process.  Although financial rewards are appreciated, recognition can sometimes be a more potent way of inspiring outstanding accomplishments.

Implement Internal Controls

The most important practices that must be implemented right away are proper internal controls.  In today’s fast moving economy, security is more important now than ever.  The best way to test your internal controls is to have them reviewed by an outsourced accounting and financial professionalLearn about outsourcing your accounting services to identify risks and weaknesses in your accounting system.

How We Can Help You

PCG provides professional services that keep your business focused on your critical objectives.  We provide strategic Accounting and Human Resource (HR) services created specifically to help you meet your goals. Through exemplary customer service, clearly defined policies and procedures as well as a forward looking perspective, we provide the outsourced solutions that your business needs to grow. A Pacific Crest Group professional is happy to meet with you to discuss solutions for your unique requirements designed to maximize all of your business opportunities.

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