What would it look like if you were purposefully managing your business with the express intent to maintain a sloppy accounting and financial function?

I know you are not purposefully doing that right now. But, many growing businesses are being built on a shaky accounting and financial foundation anyway. It is happening more from neglect than a purposeful, intentional desire to create a mediocre financial function within the company.

Just for fun, let’s turn things around and look at this from a different perspective. What if you actually wanted to create mediocrity in your accounting and financial function on purpose? How could you make that happen?

Now here’s a smart plan (or maybe not) OK, here’s the plan to pull that off.

• Let’s be slow in preparing financial statements. That way by the time we see a problem it’s too late to do anything about it and the problem has had plenty of time to fester and get worse.
• Let’s provide financial statements that are less than accurate. That way nobody really knows exactly what’s going on. After a short while everyone will lose confidence in the way the financial side of the business is being managed.
• Let’s change the numbers frequently. We’ll put the financials out for the month then change them frequently. Frustration will set in as everyone sees the numbers bounce around and they become confused about what the financial results really are/were.
• Let’s be inconsistent about when we provide the financials. That way nobody really knows when to expect them. It will help them better understand that we don’t consider financial results to be all that important.
• Let’s send the financial statements out to our partners, investors, and bankers without a written overview of the results. We’ll just give them the numbers and let them try to figure out what’s going on in the business.
• Let’s exclude any comparison of the financial results to budget, prior year, or prior months. That way it is difficult for them to understand our results in the context of our plan for the business.
• And we’ll leave out any information about the underlying drivers of our financial results. That way they never understand how our business really works.
• Let’s never provide financial projections. That way no one understands what lies ahead for the business.
• And most important of all, let’s not provide any information about our cash flow. That way the flow of cash through our business is always a mystery for everyone.

Sounds really dumb to do something like that on purpose, right?

The question is, are you guilty of actually doing (unintentionally) the things in that list? Are you actually doing many of those things even though your goal is to create a strong company you can be proud of?

A fresh perspective

Sometimes turning things around and looking at what you are doing, as if you were doing it on purpose, can help you get a fresh perspective.

Remember, a strong accounting and financial foundation will help you win financially in business. It’s not about winning any awards in accounting. It’s about creating a company that is firing on all cylinders (not just a couple).

Now’s the time to recommit yourself to making your company strong and turning your accounting and financial reporting function into an asset that helps you win.

Philip’s Blog is dedicated to helping you get the accounting and financial side of your business under control.