Sack Your Accountant, Save Your Company

Why would a business finance guy suggest getting rid of your accountant? Simple. If you want to grow a modern, future-proof business, start by breaking a few of the old rules.

If you’ve got a person on staff who worries more about accounting rules than company growth, I’m talking to you.

There are at least 3 ways your staff accountant is killing your business … and just one good way to fix it:

1. Accountants Look Backwards
Keeping the books is just the process of writing down the company’s story — after the fact. That’s not trivial, but it rarely helps you plan for the future. Imagine driving a car by looking only in the rear-view mirror. You’ll do fine if you’re going slowly in a straight line. But who wants to run a company slowly… in a straight line? When the market takes a turn, your accountant will drive you right off a cliff.

2. Accountants Are Disconnected
Every business is different. Every company relies on a unique mix of skill and value. If your secret sauce is technology, that’s a lot different than a company that relies on low-cost sourcing. But hard-core accountants put the books together the same way for every company. So not only is their information old, it’s presented in a form that is rarely useful.

3. Accountants Are Dangerous
When anyone relies too much on a process, they become blind to change and pose a danger to those around them. The accountant has more information than anyone in the company, but in their effort to comply with 600-year old accounting rules, they’ll miss the real meaning of that data. As a result, they may ignore both opportunities and threats.

The Solution is Simple
I’m not against keeping track of your money. Accounting is a necessary evil from which many good things can flow. Keeping the good things flowing (and minimizing the necessary evil) is a simple matter, but takes a fresh perspective.

First, fire your accountant. If you have someone sitting around counting beans, get rid of them — get them out of the decision making loop.

Then, hire 3 different part-time people:

1. Bookkeeper
2. CFO
3. CPA

The bookkeeper should do just that — data entry to keep the books up to date. This may be a very part time job. Someone who is really good can keep up with a $10 million company in about 10 hours a week. Your company may have a lot of transactions and take more time, but a bookkeeper is inexpensive.

The CFO is your forward-looking team member — keeping the car on the road and headed toward the goal, even as the market bends and turns. Don’t expect your CFO to balance the checkbook, but he or she will set the bookkeeper on an interesting new path — creating books that provide useful management information… not just stale financial statements. Get someone part time – a freelancer.  A good freelance or “fractional” CFO might spend less than 1 day a week at your company…but you’ll still get 10 times the value of a full-time accountant.

Yes, you still need a licensed CPA. But the CPA is around primarily to do your taxes. CPAs only really need to be around from December to March (corporate tax season).  And when they come up for air, your taxes are done for another year: Send them back home. The best bang for the buck will be a small, tax-focused firm within your local area.

This 3-for-1 trade — an accountant for a Bookkeeper, CFO and CPA gives the company a stronger foundation, a better view of the future, and a good way to deal with the realities of the IRS. With part-timers and contractors, it may even be cheaper than one full time person.

So the next time your full-time accountant is in your office telling you about GAAP rules or trying to describe the credits and debits on the general ledger, quickly usher him out. All the way out. To his car.

Send your staff accountant packing, and save your company.

Dedicated to your (Accountant-Free) Profits,

David