Accounting Best Practices

A Healthy Financial House
By Chuck Crouse
Published: November / December 2008

As we deal with the past few months of turmoil in the financial markets, it is safe to say that many people have been suffering, whether it’s dealing with the prospects of a foreclosure; lack of available credit to grow or sustain a business; higher costs of goods; or just slower sales (home builders and ancillary industries). The affect of this suffering certainly adds stress to bodies and minds of entrepreneurs who are often already stressed from spending extra hours working or dealing with complex issues involved in running a business that is our livelihood. For these very reasons, it is important to keep looking to the future and to organize our financial houses to not only weather these uncertain times, but to calm us and let us prosper.

Lines of credit and other forms of capital are extremely helpful to have as a backup during these times. However, in many cases companies have not tapped into having standby credit available or have not revisited increasing credit lines to meet their needs. It's even tougher to access or increase standby credit when times are tough or profits are lower. But good diligence will pay off, especially if your financial statements and tax returns are in excellent shape and ready to present to sources without lengthy delay or explanations. Having a financial statement audit or review is often required, and this can take weeks or months depending on the company's records - so start now!

Are your records ready for inspection? Do you get your company's key performance indicators (KPI's) in a timely manner? Do you know your KPI's? When things are going well, clean records and KPI's don't seem to mean as much. But they do matter, just as much during good times as they do during tough times. Great companies know them and know how to use them. And if you don't have them - it's not too late. Make sure you have, in house or as partners, the right financial people who can help you to understand what it is you need to do and measure. You might have to make some tough changes. But these changes will take you to the next level.

Do you have the right people? Are they in the right positions? Are they compensated correctly? Do they have the best training and resources available to help you succeed and relieve some of the stress? And are you doing enough to promote your product and drive sales? There are many books and seminars written on the subjects and executive groups available to help you with analyzing these issues and guiding you through a plan to deal with them. The problem is that these are difficult issues that historically don't get dealt with swiftly enough. All of these affect your productivity and sales and, ultimately, profitability. Strong companies tend to focus their marketing efforts and spend more, not less, during these times.

Is your financial portfolio balanced and diversified? For many business owners their personal wealth is the key to obtaining credit for their business. A weak personal financial statement and investing strategy leads to unhealthy stress. But a strong wealth preservation plan and growth strategy (or risk mitigation) provides stability and less stress while struggling through these uncertain times. Having your financial statement in order will speed up your access to credit. Seek professional help to review your portfolio, cash management and credit sources. Take a look around your business and you just might find some ways to improve your health and wellness in healing what ails your business.

Kingery & Crouse, P.A.

Chuck Crouse, CPA, is a share partner with Kingery & Crouse, P.A., Certified Public Accountants, located in Tampa, Florida. Chuck has nineteen years of public accounting experience during which time he has garnered extensive experience in taxation and auditing. Kingery & Crouse, P.A. is a full service public accounting firm with a staff of dedicated professionals providing tax and accounting services, including audits of SEC companies. You may contact Kingery & Crouse at (813) 874-1280. Find us on the web at www.tampacpa.com.

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