Few people would argue that increased transparency and better accounting procedures go a long way toward improved financial performance. But there is much more to a healthy bottom line than wise accounting practices. The best companies know that every employee must understand how the little decisions, made daily by people across the organization, impact the company’s financial performance. Unfortunately, knowing this and actually doing it are two different things.
The good news is, simple, effective financial techniques can be easily learned by even your non-financial managers, and put into practice immediately to improve profits. One company did just that, and watched their profits grow over 800% in less than 20 years. That’s an average growth rate of 45% per year.
Sounds too good to be true, right? Wrong. The most effective solutions are the simplest ones. Managers get bogged down in the endless bits of detail that the accounting department provides.
The truth is that only five percent of this information is needed for maximum financial results.
Most managers, when asked, will give you these reasons why a project fails: “high costs”, “slow moving inventory”, “lack of financing at a critical point in the company’s growth” but whatever the symptom, the underlying cause is the same. Managers fail because they lack financial knowledge and planning.
When managers understand how to set up the right strategies in the beginning and they learn to stick to those strategies with a strict financial discipline, using the proper financial techniques, they can weather their business economic ups and downs that washes the competition up on the rocks. Properly trained, managers will grasp the big picture immediately, will know how to take action, and can put into play decisions that will have an immediate impact on profitability. And nobody will have to stare at a spreadsheet all day.
Training managers to be financially effective should be at the top of every CEO’s list of mandatory expenses.
About the author
Author Carole Symonds CPA, MST is a partner in one of the world’s largest Big Four Public Accounting Firms. Named to the Boston Business Journal’s 40 Under 40 list of Greater Boston’s next generation of business leaders and innovators, Carole is a featured lecturer on corporate taxation and financial matters.
A former associate professor in the Masters program at Thomas College, she recently published her book, “Millionaire Manager”
that teaches non-financial managers five easy steps to improving profitability using no-nonsense, simple techniques. For more information, visit http://www.millionairemanager.com.