This week I reveal the Secret Accounting SUPERpower. Watch now!
VIDEO SUMMARY
I do not know if any of you read comic books as a kid. The great thing about comic books is the heroes all had cool superpowers. They could teleport. They could shoot lasers out of their eyes. They could fly. All kinds of amazing superpowers. I wanted to make this video for you accountants out there, because what a lot of people do not realize, is that all accountants have a secret superpower. You heard me right. That accountant in your business, who sits at their desk every day, has a secret superpower. That superpower is that accountants can “tell the story of the organization.” Now I know that does not sound as cool as shooting lasers out of your eyes. But I wanted to talk about this, because I meet a lot of accountants who do not realize the incredible power they have at their fingertips.
There are two things that accountants do in a business that their coworkers cannot:
- Find data in the accounting system
- Interpret the language of accounting
I want to talk about each one of these areas.
First, all information in a business ends up in the accounting system. Time cards go in the system. Department budgets go in the system. All purchases are in the system. All customer quotes are in the system. There is so much information captured in the accounting system. At the most basic level, all accounting systems are designed to generate the basic financial statements: like the Balance Sheet and Income Statement. I think most people view accounting systems as big black holes. A bunch of information goes in, and the system spits out financial statements. But accounting systems can do so much more. If you know how to go into your accounting system and find the information you need, it can be very powerful. Just to name a few, you can identify:
- Bottlenecks
- Product line profitability
- Areas of high productivity
- Return on Investment
You are taking this former black hole and providing visibility into all this useful information. These are key metrics that can help company leadership make critical decisions.
The second point is that accounting is like another language. Just like you have English, Spanish, Japanese, accounting is just another language. Accounting has special terms, rules, and processes that a lot of people do not understand unless you spend years studying accounting. The reason this is important, is that most companies publish annual financial reports. These reports are these thick documents that explain everything that is happening in a business. Unless you understand the language of accounting, when you flip through that report, it is going to just look like gibberish. When an accountant picks up that same report, they can read it like a storybook. They understand what is happening at that company, because they understand the language of accounting.
To be clear, I am not saying accountants are better then anybody else in an organization. If we are honest, there are many things that accountants are horrible at, where their coworkers are superior. What I am trying to do here is describe the special abilities that accountants bring to their organization.
To recap, accountants have these two unique skills:
- Find data in the accounting system
- Interpret the language of accounting
These skills create this superpower, where you can “tell the story of the organization.” Accountants tell this story through three ways:
- Find the data
- Interpret the data
- Share the data
Let me give you a simple example. Let us say a company has three product lines, and they want to invest in Research and Development, but they only have enough money to invest in one of the three product lines. If you are an accountant, you can use your superpower.
- Find the data. Go into the accounting system and pull out information about the profitability of these product lines.
- Interpret the data. You understand the language of accounting. So look at the numbers you found and figure out what they mean.
- Share the data. Go to your fellow leaders and arm them with this information to help them make this decision. These are big decisions that can change the direction of a company. It is so valuable when the accounting department can use their superpower to tell the story of the organization.
This may sound simple to you, but you would be surprised how rarely accountants use this superpower. I have seen a lot of different accounting departments. You can typically describe an accounting department in three categories. Each of these capabilities build on each other.
- Processing paperwork. Every accounting department performs these typical accounting tasks like generating Purchase Orders and writing checks.
- Generating reports. The next progression is when accounting departments not only perform the work, they also generate detailed financial reports for leadership.
- Providing analysis. This is the highest level, where accountants are really using their superpower to communicate.
When an accountant provides analysis, they are not just doing the work and writing reports, they are showing how to interpret those reports. Honestly, business leaders do not have a lot of time to sit around and read financial reports. They are busy people. So if you can hand your business leader a report along with an analysis of three bullet points containing the three top takeaways they should understand from that report, that analysis provides tremendous value. The accountant has done three separate things here: perform the work, generate the report, and provide the analysis. When you can provide that analysis consistently, pretty soon those three bullet points are all the leadership needs. They do not need to know about the 100 Purchase Orders you completed. They do not need to read through all the reports you generated. They just need the three bullet points to make their decisions, and move on to the next thing. Most companies never achieve this capability. Most accounting departments spend most of their time at the first level, where they are just processing paperwork. I try to encourage accountants to not just do the work, but provide the analysis.
The reason why I am talking about this, is that I have seen this approach transform organizations. When you can tell the story of your business to all your co-workers, you can supercharge an organization. I will give you an example. Imagine two competing businesses. In one business, you have an accounting department that just sits at their desk and processes paperwork. In the competing business, you have an accounting department that takes all the information at their fingertips and provides analysis. You better believe that second business will have a competitive edge in the market. If you are an accountant watching this, just know that you have a tremendous opportunity to impact your organization. Use your superpower to tell the story of your business.
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Neither Zach De Gregorio or Wolves and Finance Inc. 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.