According to a survey by TD Bank, 46% of the 508 small business owners surveyed said that bookkeeping was their least favorite task.
Despite a general dislike for accounting, most small business owners understand how important it is for their business. It helps them manage finances, capture expenses, track profitability, monitor cash flow and assess solvency, to name but a few benefits.
The problem is that your employees may not see it that way. They may view accounting as just another task. For them, the numbers might seem arbitrary. Salespeople only care about sales. The technical department only cares about technical issues. Customer support only cares about customer complaints. And so it goes.
How do you change this perception? How do you get people to look at the numbers and engage in accounting?
The key is to get your team to see how their work makes a difference in your business. How it contributes to business results. How it improves the bottom line.
Do that, and they’ll feel more engaged and motivated. They’ll align their work with business results and take ownership of the results they’re trying to improve.
Seems simple enough. But what strategies can you implement right now to get them excited? Here are 5.
It’s likely that you have specific procedures for invoicing, expense tracking, time tracking, and even billing. You may record transactions manually or use software. Or, perhaps you choose to only record transactions when cash changes hands as opposed to the accrual method.
Regardless, you understand why you follow those procedures and why you don’t take shortcuts. But employees may not understand.
They may feel like the procedures are unnecessarily long, and seek shortcuts or make that paperwork the lowest priority task on their list, wholly apart from their “real work.”
You can avoid this perception of accounting and paperwork as disassociated from their work by explaining the reason behind the process. For example: “The reason we want to accept payments online is because our customers want ease of payment and it speeds up how quickly we get paid.”
If they understand, they’ll be more inclined to follow it and complete it. They may even have ideas for improvements! More importantly, if you connect that procedure to a positive result, you’ll engage them.
Let’s look at an example: Let’s assume you want the sales team to complete travel expense reports once a month. You need them to provide an itemized breakdown in your accounting software before sending it to the financial manager.
Some staff may take shortcuts and ask if they can send only the total with no detailed breakdown. Others simply won’t get round to it.
The key here is to help them understand that completing the paperwork in a timely and accurate fashion helps everyone know exactly where the business stands. It’s also crucial for control costs that may otherwise creep in over time.
As a leader, it’s essential to share your business goals, priorities and performance with employees. Put simply, they should never be left to wonder: How’s our business doing?
Moreover, you should also help employees understand the link between the priorities and the work they’re doing.
For example, one of your priorities may be to improve cash flow. To get your salesperson excited about this, you could show them – with helpful illustrations – how their sales and efforts to control sales costs – such as client meetings, food costs and travel expense – have contributed toward improved cash flow.
By sharing such results, you’re helping employees connect the dots. They’ll better understand the importance of their work and how it contributes toward a better result.
You can also use accounting software that allows for shared visibility of critical financial metrics.
One way of making this easy and immediate is investing in a tool that shows performance dashboards that can be read at a glance. FreshBooks, for example, has a unique reporting dashboard that provides a summary of company profitability.
Because it’s the same software that you manage invoices and expenses from, it will always be as up-to-date as your inputs. Plus, you’re able to share these reports with select employees.
Key performance indicators or KPIs are measures set to determine how well a company is achieving its business goals.
To ensure employees are on the same page and working toward common goals, link these KPIs to a specific goal and share it with your employees.
For example, you could have a goal of increasing sales by X% with a KPI that sales teams need to get a certain amount of customers each month. Conversely, you might have a KPI to decrease costs that involve every individual looking for more efficient cost savings on everything from meals and entertainment to office equipment.
Every individual on your team should have individual KPIs that ladder up to your business goals and recognition for significant contributions to those goals.
Part of the reason why people flinch at the term “accounting” is that there’s much manual input and many of the tasks involved are repetitive and mundane. Think of creating a new invoice for a client each month even though the client is on a retainer and the invoice details remain the same each month.
Or, recording expenses and income in spreadsheets and then creating reports from that. Not very exciting, right?
Thankfully, today you can invest in software that leverages the cloud to automate many of these tasks.
You can set up recurring invoices for clients who are on retainers. You can connect to your bank account for automatic income and expense classifications.
The software even gives you an at a glance overview of how your business is performing with profitability reports. All this, in a way that non-accountants can understand!
Of course, not all software is created equal. There is software that requires you to jump through many hoops, and you may even need training. The problem is that training involves a learning curve and it’s more likely they won’t use the software.
FreshBooks is built to be ridiculously easy – so easy that you don’t have to have any accounting knowledge to use it. What better tool to give your team to get them engaged with managing and tracking finances and business performance?!
If you have a salesperson or team, this section is for you. I remember working for a company as a Business Development Manager. I was responsible for growing company and understood the significance of the numbers, but I was never excited about them.
That was until the company introduced a commission structure. Numbers were now my currency. I paid close attention to them. It was in my interest. After all, the more sales I made for the company, the more money I made for myself.
You can apply the same principles to your entire team, whether they’re in sales, finance, customer support or even project management. The key is to reward employees for performance, so they sustain that performance. For example, you could give them a bonus for achieving their KPIs.
Accounting is crucial for assessing business performance. You understand that, but your team doesn’t necessarily.
In fact, getting your team engaged and excited about accounting may feel difficult. But it doesn’t have to be if you use the right strategies:
What strategies do you use to get your team excited about accounting?