Let’s be honest, while most businesses know they need accounts, it is generally seen as a necessary evil. Few business owners recognise the power of the information at their fingertips and how, if properly used, they can make a positive contribution to the business, particularly the profits.
If we’re to be completely honest, most clients only contact their accountant when there’s a problem – revenue are sending letters or they have cash-flow issues etc. At Aurora, our clients see these issues coming long before they materialize. This is only achieved through the use of the accounts information they ALREADY have at their disposal.
So what do we do with this information?
Our clients get monthly management accounts. While most accountants see this as their job complete this is only our starting point. Challenging our clients, ‘we’ use this information:
Were we profitable this month?
How long does it take to collect our money & why does it take so long? (Debtors days)
Did we hit our sales target or do we even have a sales target that was established as part of a planning process?
What is our (reconciled = actual) bank position at the end of last month and what is it going to be at the end of this month?
What is our labour to sales, is it within industry norms and how does it compare to previous months/years?
While this may not be true in all cases, more often than not these questions cannot be answered. We often find that business owners spend more time managing the operations and not the business. We see our role as an extension of the management team – we take the stress of the accounting function so as you can get on with things.