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5 Key Steps Accountants Take to Promote Financial Plan Success

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A business’s success and growth rely on a solid financial foundation. With increasing complexity and volatility in business today, companies depend on their accountants and financial teams to use sound accounting practices to drive profitability and growth. Accountants with a deep understanding of the businesses and industries in which they operate are uniquely suited to provide leadership in developing financial plans as well as the strategic financial analysis process.

Here are five ways in which accountants can promote the financial success of their companies:

  1. Improve Profit Margins and Create Long-Term Value

A system that accurately and reliably accounts for all expenses and revenues is the foundation for profit opportunity discovery. Once basic accounting systems are in place, management accountants apply strategic analysis frameworks taught in programs like the online MBA with an emphasis in Accounting from the University of West Florida.

One proven method is called the Return Driven Strategy. This framework provides a structure for analyzing and improving financial strategies to create long-term value. This strategy originates from research on global organizations that have proven a superior ability over time to generate substantial returns on investments while applying high standards of business ethics. This framework helps analyze and develop growth initiatives, evaluate business plans, assess merger and acquisition opportunities, mitigate risks and communicate effectively to the board and investors.

  1. Optimize Business and Financial Operations

It is common knowledge that accountants are traditionally involved with payroll, general ledger, accounts receivable, accounts payable and the preparation and presentation of financial statements. Today’s best-educated accountants, though, also operate in higher-level business and financial decision making.

Business schools prepare accountants with techniques for improving business operations and strategies, including SWOT analyses (strengths, weaknesses, opportunities and threats). These analyses provide a comprehensive understanding of the internal and external success factors that companies can leverage. Managerial accountants perform these analyses on regular schedules. Experienced managerial accountants often use these analyses to consult and make investment and business strategy recommendations to leadership.

The Blue Ocean Strategy is a framework for uncovering new opportunities for technology and product and service innovations, determining the profit ceiling on potential initiatives. The strategy represents a departure from a conventional controller’s discipline of rejecting opportunities and risk and a move toward finding new ways to pursue growth.

  1. Drive Innovation and Growth

Experienced and well-trained managerial accountants consult with their company’s leadership team to drive business growth, using various techniques and strategies. Among them is Porter’s Five Forces, a framework for understanding the industry context in which a company operates, including competitive threats to its value proposition. Often, the managerial accountants guide executives through this process of uncovering the five external forces most likely to impact the profitability of a current or potential market. These can include supply chain issues, new products from competitors and changing consumer demands.

  1. Minimize Expenses and Promote Savings

Expense minimization, savings maximization and understanding spending in relation to revenues are the three components of sound budgeting and protecting a company’s cash flow. Accountants are an organization’s budgeting leaders. Budget planning involves compiling fiscal histories, tracking transactions and expenditures, projecting future income and expenditures, preparing statements, observing rising expenses and uncovering opportunities to reduce costs and promote savings. The “bean counting” aspect of accounting remains vital and foundational to financial planning.

  1. Protect the Company’s Revenues and Financial Assets

Threats to a company’s revenues and financial assets include increasingly complex federal and state laws, changing IRS tax regulations, internal and external fraud and theft. Accurate recordkeeping and ongoing assessments are necessary to uncover out-of-the-ordinary activity, and expertise in the laws affecting accounting practices and taxation are all under the domain of accounting and finance.

Far more than number crunchers or bean counters, today’s financial and managerial accountants apply their skills inside and outside the accounting and finance departments. They become experts on the operational side of their businesses and merge their areas of expertise to facilitate sound financial and investment planning. If being a key contributor to your organization’s financial success appeals to you, earning an MBA in accounting may be your best career move.

Learn more about the University of West Florida’s online Master of Business Administration with an emphasis in Accounting program.

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