How to Avoid Accounting Rescue Work
We do a lot of what I call accounting rescue work at PlusPoint. It’s generally not what our clients initially come to us for; they often don’t know they need it.
Clients often call us when they have a need or pain they cannot solve themselves. It can take many shapes, and we know from experience that often, the pain our clients experience is the symptom of deeper issues. Think of an iceberg with the symptom (pain) on the tip and the real problem below the waterline. So, the first thing we do when engaging with a client is to go below the waterline to determine the issues causing the pain. Unfortunately, we frequently find that our clients have not set up their accounting systems, processes, and teams to support the organization’s needs. The information cannot be relied upon to tell the story of the business or help set the future course; the first thing we must do is rescue it.
What is accounting rescue work?
It is the process of:
- restructuring accounting systems
- restating accounting results
- creating processes to capture and correctly record and report meaningful financial information
It is time-consuming and expensive.
Why is this necessary?
Many organizations treat accounting as an afterthought, a necessary but unimportant part of the organization. They relegate it to the back of the house. To the extent they exist, systems are poorly set up and managed. The team is understaffed or staffed incorrectly. Critical processes are nonexistent or inconsistently followed. This results is an unloved part of the organization that is often maligned because they cannot produce information to support a growing organization.
Companies operate this way until something happens, and they no longer can. This is where we come in.
Elevating the role of accounting
It doesn’t have to be this way. Recognizing the strategic value of your accounting organization, approaching systems and staffing consciously with an eye to growth, and making appropriate investments along the way will position your accounting team to add value and help you grow your business.
We elevate the role of accounting in organizations and help them continually deliver increasing value. So, over the coming weeks, we will post a series of blogs addressing some of the common issues we see and our recommendations for correcting or avoiding these issues to set your accounting function up for success. These will cover a broad range of topics:
- setting up your chart of accounts
- selecting a basis of accounting
- understanding why the structure of the income statement matters
We believe getting the basics right is the first step to moving accounting from the back of the house to a strategic voice in your organization.
Need Help with Your Accounting?
We are happy to help. Reach out to schedule a free consultation.