You don’t need a certified public accountant on speed dial to tell you certain things. A business accountant is a great resource for all sorts of issues, but when it comes to matters like identifying potential areas for improvement, all you really need is some good old fashioned common sense. For example, do you want to know if your cash flow could stand to be improved? That’s easy. If you can answer “yes” to the following question, consider it a warning sign that you need improvement fast: Are you having trouble collecting from your customers within acceptable timeframes?
If no, congratulations—you’re doing a lot better than most businesses out there. The fact is, most companies will answer with a hearty “You bet I am!” If this sounds like the first words that came to your lips, don’t take it as a sign that you’re dealing with a bunch of deadbeats and have to start selling your wares to a higher class better capable of paying their bills on time. Even a junior business accountant can tell you that to nip this problem in the bud, all you have to do is:
• Invoice faster. Don’t waste time where receivables are concerned.
• Implement some soft collection efforts, including letters or even phone calls.
• Track reports that tell you how far behind your customers are so you’re not suddenly surprised to discover that you’ve got no flow of cash.
Fortunately for you, common sense doesn’t cost nearly as much as a certified public accountant does. But even if you’re not dealing with issues of common sense, you can get far more bang for your buck by outsourcing your accounting needs to a third party bookkeeping firm. The upside? Cost is considerably less than that of a dedicated business accountant. The downside? You’ll have to explain to your CPA why you’re taking your business elsewhere. We can’t help you there.