In the 1990's I was the CFO of a construction company where one of my responsibilities was to visit and monitor out-of-state jobsites. On the mornings that I traveled, I would normally leave my apartment between 4-5 am in order to arrive at the jobsite early. On many of these drives I experienced dense fog until sunrise.
Driving in the fog on a rural two-lane highway at 55 miles an hour can be uncomfortable and disconcerting. It was on one of these drives that I thought of an analogy that I gave to the owner of the company later in the day.
Imagine yourself driving fifty-five miles an hour down a two-lane highway at night in a dense fog. If a deer were to jump in front of your vehicle, you would hit it at the approximately the same time you were aware that the deer was there.
Through 23 years of small business management experience, I've learned that a small business that fails to implement adequate accounting and financial reporting systems are also driving in the "fog" of a similar looming disaster. Without a good accounting, you may not discover that your company is in the middle of a financial crisis until it is too late to take the correcting action necessary to save your business.
I like to tell clients that accounting is the scoreboard of business. It allows you to know your company’s current financial standing and track your firm’s performance. Accounting can also identify the areas of your business that are excelling and those that need to be improved or eliminated. As a small business owner, I know personally that it is comforting to know exactly where your company stands financially.
A good accounting and financial reporting system can definitely help you run your company more effectively and profitably, thus keeping you out of the fog.