When you are sick or not feeling well, you visit a medical doctor.
When you need to start building your dream house, you go to an architect.
Where do you go when your business is making losses?
You go to the accountant.
Today, the names are many. But the role has not changed. Whether it is a chief financial officer, a growth officer, a strategy executioner, a business analyst or accounting officer, your business needs someone who can help you know how you make money, how you spend it and how much you must keep for investment in growth and innovation.
But that is not enough.
As an entrepreneur or chief executive, you need to know the impact of your decisions on your future cash flows – simply put – if you spend money on a project today, will it grow your wealth in 2 to 10 years’ time, and by how much? Which is the best project to bet on for higher profitability? Which one will be a game-changer?
A great accountant should be able to do that.
Many quack accountants may advise you to find a finance professional, trying to hide under the new hire!
That is a piece of good advice, only that you will be double paying for the role. Either you have a bookkeeper, an accounting technician or a finance and accounting professionals, your chief financial officer who understands the short- and long-term games for your business.
With automation, an intern can help with the manual record-keeping processes. The real value is derived from insights and analysis.
- Who are our top customers?
- Which services bring the most revenue?
- What is the preferred business model?
- Where will growth come from in 2 years, 5 years, and 10 years’ time? And what should we start doing or investing in today to make it happen?
- Which of the opportunities available, provide the best return on investment or are the best use for our limited financial savings?
- How do we better utilize our current cash flows?
- If we continue doing what we are doing, how will our performance be soon? What needs to be changed now to win?
As you can see from the above, the finance function must champion the strategy – especially your growth strategy. Where will growth come from and which investments to undertake today to win in future.
Don’t have an accountant because the business needs one.
Have one because they give you a market advantage. And an accountant that has been well trained – provides insights that a quack would not.
And you can easily find out.
Does our finance team champion strategy? Do they provide us with the numbers and analyses we need to grow? How easily does it take our finance team to provide insightful dashboards and business growth reports?
The world has changed.
And so, has the accounting profession.
Years of processing petty cash, arranging payment documents and posting transactions into the accounting system are long gone. These jobs are now for accounting technicians who are training to support finance professionals.
Now is the time to review the job description of your accountant or finance officer. They must be tasked to support growth, strategy, execution and business intelligence across the organisation to provide a competitive advantage.
As they say, data is the new oil.
And your finance team must transform into data scientists who are comfortable with both internal and external data, structured and unstructured data to provide top management with meaningful insights to see opportunities that many would miss. That is what we call the data advantage.
You don’t need accountants and finance officers for the sake of having them in your company. There is no prize in that. You need professional accountants who are members of professional association body. In Uganda, any member of the Institute of Certified Public Accountant (ICPAU), in good standing is a good accountant.
Accountants add value. They are not a necessary evil. But you must recruit well.
Copyright Mustapha B Mugisa, 2020. All rights reserved.