Christmas has always been my favorite holiday. From the lights, special music, movies, and holiday foods to the goodwill gestures and generous giving often found during this season, Christmas is truly the most wonderful time of the year. As an accountant, one of my favorite Christmas movies is “A Christmas Carol” (1984) based on the novel by the same title written by Charles Dickens. As the famous storyline goes, Ebenezer Scrooge is visited by the ghost of his deceased business partner Jacob Marley who foretells of impending spirits to come that will deliver an important message. Then in succession, Scrooge receives a visit by the ghosts of Christmas past, present, and future. A very relatable tale that I often contemplate as another year comes to a close and the prospect of a new one is just around the corner.
2021 Strategic Accounting Strategies for Small Businesses
The decisions of the past, including the ones made today, will most certainly have a lasting impact on the future. In that spirit, thinking about the strategic planning of a small business enterprise this time of the year, I made a list of some of the outsourcing strategies, gifts if you would, that a business could possibly use to help transform their future in the coming year:
Cloud Computing: The first item on my list is to consider moving the accounting system, aka general ledger, into the cloud. This strategy, if not already in place, brings with it the gift of knowing that your company’s data is stored offsite and backed-up (often with multiple redundant back-ups in several locations). Many businesses often avoid this decision based on desktop software that is utilized in the company. They do not want to move to an online version of the desktop application fearing the software will not have the same functionality. With the Cloud solutions offered today, that issue has been resolved. Desktop software can be placed in the cloud without limiting functionality. In some cloud solutions, even multi-user access to the same desktop application is seamless, assuming the appropriate licenses are in place. Overall, the cloud solution is the gift that keeps on giving with virtual access, offsite back-ups, and a reduction of network hardware costs such as local database servers, etc.
Outsourced Payroll: The next idea has been around for some time now and has been expanding rapidly in the marketplace. Outsourcing the payroll function of a small business will free up the owner’s time and will help to ensure that federal payroll taxes are paid timely. An added bonus is that all quarterly payroll reports are taken care of including getting the annual W-2’s out to employees. A majority of the outsourced solutions today interface with most of the accounting systems used by small businesses, so making the switch is almost a seamless process.
Virtual Back-Office: This is probably the most controversial item on my list is to consider moving the business’ “back-office” function out of the company. There, I said it, even though I tend to be a control person who does not delegate well (it’s in an accountant’s DNA)! Yes, it is hard to give up some control of essential bread and butter functions like accounts payable, accounts receivable, and even human resources, but the efficiency and cost savings gained can be well worth the time to investigate. For some small businesses, the reality is that the business owner usually performs all or at least some of these back-office functions. It ties up their time, creative energy, and it’s often not their primary skill set to begin with. By outsourcing these functions, you can obtain the services of highly trained individuals at a fraction of the cost while freeing up time to invest in operating the business.
CFO on Demand: The final gift idea I offer can come in many shapes and sizes. Often small business owners need specialized help with budgeting, financial statement preparation & analysis, cash-flow projections, and product/job pricing to name a few. The great thing about this service is that the business owner can get guidance from a seasoned Chief Financial Officer (CFO) for a fraction of what it would cost to hire a dedicated person. This concept has been around since the 1990s and has been expanding with the advent of virtual technology. From a one-time project to monthly financial reviews, the expert advice can bring a whole new competitive edge in running a small business venture. In today’s marketplace, there are dedicated companies that offer these specialized services, and even accounting firms have entered this space in offering a full-service line-up to their clients.
Don’t be a Small Business Scrooge
While there are so many more ideas that I could add to my list, I think these are my top picks for any business owner to consider for the coming year. I could only imagine what Scrooge would think about these futuristic services that are available in the present. Speaking of Scrooge, I will leave you with my favorite all-time movie line from “A Christmas Carol”: Jacob Marley, after regaling Scrooge with his torments, reflects back on the regrets of his life and states, “Business. Mankind was my business.” What a truth to contemplate on this Christmas Eve. No matter our vocational calling, let us not forget what truly matters!
Merry Christmas to all!
To learn more about the various business degrees offered at the West Texas A & M University Paul and Virginia Engler College of Business, click here.