The businessdictionary.com defines “value creation” as “the performance of actions that increase the worth of goods, services or even a business. Many business operators now focus on value creation both in the context of creating better value for customers purchasing its products and services, as well as for shareholders in the business who want to see their stake appreciate in value.”
Generating that elusive word – value – is one of the key aims of most modern businesses. We evaluate our operations in terms of value created, and, as the lynchpins of industry, employees are evaluated in terms of what value they can create as well. In some roles, “value” is difficult to define. In others, it is visible and measurable. The role of part-time accountant is one of those. When your company brings on a well-trained part-time accountant with a clear vision of what she must achieve, value creation becomes an integral part of what she does. In a course entitled “Creating Value through Financial Management”, US-based Certified Public Accountant Matt Evans outlines different ways in which this can manifest.
- A part-time accountant can structure data so that it “provides information and doesn’t just occupy storage space”. If there’s someone keeping your books, then you’ll have a record of your sales figures every month; what money went out, what money came in and what the bank balance is. But a part-time accountant can give form and structure to your information: when was the leanest time in the month and why? When are the profit margins being squeezed and why? These are the kinds of ways in which your part-time accountant can make your company information make sense for you.
- A part-time accountant can help you shift your focus from earnings to market value. As a business owner who may have some basic training in accounting, it’s easy to place all your emphasis on what your company is bringing in overall. Indeed, Evans points out that this is the thrust of the traditional accounting model. But a forward-thinking part-time accountant can help you pay more attention to the quality of the earnings you’re seeing, which is a truer indicator of what your business is worth. The problem with an earnings-based emphasis is that all of the focus is on “the quantity of earnings,” says Evans. Instead, “what counts in valuations is the quality of earnings” – or in other words, economic performance such as cash flows rather than accounting performance such as net income. A great part-time accountant can help you shift your strategic focus to this more holistic approach.
- A part-time accountant can help you ensure departmental accountability. If you know your company is not using resources as well as they should, but you can’t pinpoint where in the operational process it’s happening, your part-time accountant will. He’ll help you measure and monitor every cost centre in the business. The result: you can weed out wasteful expenditure and streamline your processes.
“The accounting and finance function can lead the way for the entire organization when it comes to value creation,” says Evans. “After all, the financial function usually has insights into all other functions within the business and only the financial function can fully grasp the principles behind value creation.” If you’re looking for a part-time accountant who can help create real value in your company, contact The Finance Team. Our qualified, experienced finance executives can provide you with the help you need, for no more than the duration of time that you need it.
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