In a recent episode of the Business Choreography Podcast, hosted by Michael Johnson, I, Jason Kruger, founder of Signature Analytics, discussed the intricacies of finance and the pivotal role rigorous accounting processes play for businesses.
Listen to the entire podcast here:
Here are some notable insights from our conversation:
Before starting Signature Analytics, I accumulated a diverse range of experiences in the finance domain, notably in financial audits. While at global firms like Deloitte and Touche, my primary mission during those financial audits was to instill confidence in banks and equity investors about a company’s financials.
A Gap in the Market:
I noticed a recurring trend among small to mid-market businesses. Numerous owners viewed accounting and finance merely as obligatory tasks, concentrating mainly on routine chores like bill payments, invoicing, and yearly tax preparations. But as these enterprises expanded, the shortcomings of this basic approach became evident. Owners started identifying the crucial challenges of making strategic decisions without precise and updated financial data.
Signature Analytics’ Mission:
To address this, I founded Signature Analytics in 2008. Our company offers outsourced accounting and CFO advisory services, tailored to fit the distinct needs of each client. Understanding that not every enterprise necessitates a full-time executive accounting team, we furnish a flexible, fractional solution. Our foremost objective is to equip businesses with precise financial insights, ensuring leaders can make decisions that spur growth. We integrate seamlessly with existing teams, emphasizing the significance of financial data in making pivotal decisions spanning operations, sales, and marketing.
Organic Growth and Expansion:
I began with just a computer, resonating with the hurdles many budding entrepreneurs face. Over time, I prioritized building a resilient foundation, leading me to grow and diversify our team. Today, Signature Analytics boasts 80 to 85 full-time members, serving 80% of our clientele remotely. We’ve positioned ourselves as trustworthy allies for our clients, steering them towards success via a deep understanding of their financial dimensions.
“Audit” is not necessarily a dirty word
It’s common for business owners to shudder at the term “audit”, often linking it with the IRS. However, it’s vital to grasp that audits can be advantageous. They give third parties a solid assurance about a company’s fiscal health. These assessments benefit a spectrum of stakeholders, from boards to investors and financial institutions. An audit validates adherence to accounting best practices. If discrepancies or issues arise, auditors highlight these, albeit with terms like “deficiencies”. Yet, these pinpoint areas ripe for refinement. The ultimate aim is for proprietors to trust their financials, streamlining decision-making. We at Signature Analytics don’t conduct financial audits. Instead, we bolster businesses in their internal accounting endeavors, ensuring smooth audits by furnishing accurate and timely data.
What is “Fractional” Accounting?
The “fractional” trend is gaining traction. At Signature Analytics, we use “fractional” and “outsourced” synonymously. Essentially, “fractional” signifies accessing specialized skills for the precise duration that aligns with your business’s immediate needs. Thus, if a full-time CFO isn’t the right fit, a fractional solution might be ideal. Business owners must ensure their teams possess the requisite expertise, even if not on a full-time basis. Though hiring a CFO can be an investment, they bring indispensable knowledge. Many SMEs recruit one individual for varied financial duties, which can lead to inefficiencies and possible inaccuracies. Employing a full-time CFO for smaller firms might result in them managing rudimentary tasks, which isn’t economical.
Our strategy is to delineate roles based on a client’s existing team, and fill gaps fractionally. Businesses may not always require a full-time CFO, but they invariably need strategic counsel. For instance, a manufacturer might be oblivious to their products’ exact profit margins. With fractional expertise, companies gain access to accurate data, fostering informed decisions, whether it’s promoting a high-margin product or enhancing a lower-margin one.
The Signature Analytics 5-Step Process
Onboarding an outsourced accounting team can be daunting. How will the process unfold? How long will onboarding take? Will the fit be right? At Signature Analytics, we’ve established a five-step process for our engagements to streamline the transition.
Understanding the Business:
We begin by grasping the enterprise from the owner’s viewpoint, discussing aspirations, schedules, and how fiscal data influences choices.
Existing Team Evaluation:
Before instigating changes, we liaise with the current team, understanding roles, efficacy, and challenges, aiming to bolster, not replace.
Four Critical Areas we evaluate are:
- Internal accounting and finance Processes
- Technology and how it’s utilized
- Reporting infrastructure
Post-assessment, we craft a 3-6 month action plan. This could encompass reformatting data, refining reporting methods, or even tidying current financial data.
Based on the firm’s demands, we establish daily, weekly, or monthly report structures, enhancing visibility into operations.
As time progresses, our goal is to instill confidence in businesses regarding their fiscal functions.
Optimization is a journey, not a destination. By setting clear expectations, prioritizing tasks, and ensuring costs align with value, we aim to guarantee both immediate results and enduring success.
Being an entrepreneur is a thrilling journey. The smartest move to ensure success is self-education, and understanding the nuances of your venture. At times, it entails roping in external talent for specialized insights. If I had to encapsulate the essence of running a thriving business, it would start with “Cash is king.” It’s not a cliché. Grasping your cash flow, its sources, and future requisites is paramount. Every business is unique. So, acquaint yourself with your enterprise, be humble, and surround yourself with the right expertise to make informed decisions rooted in reliable data.