7 Reasons You Need to Hire and Accountant

by Zach De Gregorioin Uncategorizedon Posted on

In this video, I am going to be giving you the 7 reasons you need to hire an Accountant. The two obvious reasons would be to prepare your taxes or perform a financial audit. But I am actually giving you 7 reasons on top of that of how an accountant could be helping you grow your business. WATCH NOW

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VIDEO SUMMARY

Let us start with your business. If you are a business owner or a business leader, you have created a money machine. You have people and processes that work together to spit out money. When I talk about accounting, everything is from that perspective. If you can make your money work better for you, you are going to end up with more money in your pocket.

So let us go through the seven things accountants can do to help.

  1. Create internal controls. We have to start with internal controls. Every business should have an accountant come in to look at your internal controls. These are the processes you follow in accounting. Let me explain why this is important. Your employees will steal from you. Here are some statistics:
  2. The costliest white-collar crimes actually occur in smaller companies that have less than 100 employees.
  3. The average amount of money that is stolen in an armed robbery is just over $3,000; while an average white-collar crime can easily bring losses over $500,000.
  4. The average company loses almost $10 a day per employee because of different forms of fraud.
  5. If check forgery was included in white-collar crime statistics, it would double the amount of white-collar crime reported yearly.

These are shocking statistics. There are a lot of criminals stealing money from businesses. I have talked with business owners who have had employees steal from them, and they always say the same thing. “I cannot believe this person I trusted stole from me.” It is usually someone they trust. However, white collar crimes can usually be avoided if you just have strong internal controls. Because it is like you were taking all your money and putting it in a big pile on a table in front of all your employees, and saying “alright people, go about your work, but please do not steal any of this money.” And sometimes people just cannot avoid the temptation. I will give you a simple example. If your business uses company credit cards, what is preventing your employees from taking the company card and buying a new furniture set for themselves with your money? That is just one situation that happens a lot. Please protect yourself, and hire an accountant to come take a look at your business. A lot of times what happens is the accountant will look around and find that you are extremely vulnerable, and you have no idea. This is your money. Please protect it.

  • Perform large purchases. Every large purchase should be reviewed by an accountant. The dollar amount will be different with every company, but I would think you would want this for any purchase greater than $20k. I see so many companies spend huge amounts of money on equipment and software, without doing any due diligence. If you have a purchasing agent at your business, they can perform these activities, but a lot of companies do not have the staff. It is really helpful to have an independent accountant who can assess different quotes, ensure that purchases are meeting company requirements, and perform Return on Investment calculations.
  • Project Management. Accountants make great project managers. Especially if you are implementing a new business process, opening a new office location, managing a capital improvement project, or integrating new technology. There is a very good reason for this. Accountants have the unique experience of working closely with all aspects of a business. Whether it is sales, operations, legal, IT, administration, accountants tie all departments together in the financial system. They understand how everyone works together with the goal of making you money. On top of that, accountants tend to be very organized people, which is always good in a project manager.
  • Financial Analysis. One thing I always encourage business owners is to get a person on staff as soon as possible, just to perform financial analysis. If you are unclear what activities that role would perform, just type into Google “Corporate Finance Job Description” and you will get lots of examples of their tasks. Let me give you a simple explanation. Accountants have at their finger tips massive amounts of data in the financial system. This information can tell you all sorts of things about your business. You want someone sifting through this data, and providing you with insight on ways you could be making more money. Let me give you an example. One of the biggest challenges for business leaders is setting staffing levels. Every business wants to grow, but at the same time, you do not want to over hire. It is very tricky picking the right level to hire at, which is a combination of current cash available, current work in progress, future revenue projections, and future spending projections. This is just one example where an accountant could be helping you make these critical decisions.
  • Establish Weekly Reporting. Reporting is a unique skillset. But if you are a business leader, let me explain what you should expect. When you walk into your office on Monday morning, you should have an updated weekly report with financials, dashboards, key performance indicators, and analysis. I do not see how business leaders can make decisions without regular reporting. You need an accountant who can design these reports, automate them, and make them available to you electronically.
  • Improve Excel spreadsheets. This is another area that can have a huge impact. Your accounting department will use many different Excel spreadsheets. You can hire an Excel expert to come in and help you improve and automate these spreadsheets. There are so many times I have seen accounting departments using a cumbersome spreadsheet that would take them one week of labor time to update every month. Then after improving and automating that spreadsheet, that week of labor can be done in one hour. I just gave you a week of labor, just because there are so many messy Excel spreadsheets out there that can be improved.
  • Give training classes. Finally, we have training. This is one of those things that is so often overlooked in a business. I talk with so many business leaders, and they want their businesses to grow and improve, and at the same time, they do not provide any training to their staff. You should have business goals and milestones, and then design training to help your staff reach those goals. Accounting training specifically is so important. Accounting really only works well if all departments work together to follow business procedures. I recommend that businesses have company-wide accounting training every year. This could just be an hour long, but it goes such a long way to get all your staff on the same page on how you want them to handle your money. In addition to this, I also recommend you provide ethics training. It is so important that a business encourages a strong ethical culture, and the way you build culture is you get everyone together and talk about ethics, expectations, and why it is important. Ethics ties everything together in accounting, and to bring back the first point about internal controls, it prevents white collar crime in your business.

So these are the seven reasons you need to hire an accountant. Each one of these things could significantly improve your bottom line.

  1. Create internal controls
  2. Perform large purchases
  3. Project Management
  4. Financial analysis
  5. Establish weekly reporting
  6. Improve Excel spreadsheets
  7. Give training classes

I really hope people listen to this video. I have seen so many businesses not do these things, and what ends up happening is they pay the price later. And it can be painful. The whole reason I make these videos, is I want to share knowledge about ways that can help you and your business. I hope you found this list helpful and I wish you the best in your business.

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Neither Zach De Gregorio or Wolves and Finance shall be liable for any damages related to information in this video. It is recommended you contact a CPA in your area for business advice.