Over the last ten years of consulting I have noticed a disturbing trend in business that I think we should all recognize and correct.
Business fails to recognize and respect the importance of accurate accounting.
In the last two years I have particularly noticed that business owners and managers fail to qualify the person or people who will manage the accounting function in business.
I often tell my students and clients that the accounting aspect of business is just as important as the gasoline in your car.
In other words, businesses are like cars. As we all have different cars, those cars all have the same basics.
Each has tires, engines, radiators and different body styles, where the one common factor in all vehicles is the gasoline.
No matter how cool you think your car is, it’s not going to go anywhere with the proper gasoline.
In understanding this parallel, we can then relate it to business and the accounting function of all business.
To agree that all cars need gas to operate, we can also agree that business needs proper accounting to function properly.
So we have to ask ourselves as business owners and managers, do we have the appropriate personnel and processes that manage our accounting processes?
We need to recognize that our accounting processes dictate our overall business strategies.
Similar to the gasoline in our cars, if we pump the wrong gasoline in our cars, we won’t get too far.
In our businesses, if we do not properly account for our business…we won’t get too far.
Simply put, we are not hiring or contracting the proper resources to manage our accounting and finances processes.
As I have said to many many clients over the last couple of years, re-evaluate your accounting processes or it may cost you in the end.