Good accounting is strategic accounting. And strategic accounting is good accounting. It’s really that simple.
Today, the rate of change in business is staggering. Markets and consumer preferences change rapidly. In such a fast-moving world, businesses need access to reliable, up-to-date information to make good decisions—and this includes financial and accounting information. Strategic accounting gives business leaders the information they need when they need it to make informed decisions and meet new or changing demands.
This article explains strategic accounting and how it benefits your business. It also provides ideas on where to start to take a more strategic approach to accounting.
What is strategic accounting?
XPECT defines strategic accounting as accounting alignment. This entails alignment of accounting priorities, objectives, and systems with organizational priorities and objectives and relevant external factors impacting business results.
Benefits of strategic accounting
Taking a more strategic approach to accounting for your business can yield a range of benefits, including:
- More informed decision-making
- Increased profitability
- Increased company value
- Improved financial visibility
- Improved cash flow through insight into identifying and resolving cash flow issues
- Better forecasting for return on investment of capital expenditures
- Lower financial risk, including those associated with rising or falling interest rates, higher raw material costs or sourcing difficulties, and more
- Stronger long-term company growth and stability
Simply put, strategic accounting can help your company make decisions or changes that can alter your business trajectory.
How to take a more strategic accounting approach
Strategic accounting is a shift that can require some internal change management as well as additional expertise—but it’s well worth it for your business.
Strategic management implementation is a process that includes several steps, including setting goals and establishing metrics, gathering and analyzing financial and accounting information, defining and implementing strategy, and monitoring performance. Professionals—on staff or outsourced—will need to also understand your company’s vision, mission, and opportunities as well as any industry or market headwinds that may come into play. In addition, two-way communication should be set up between leadership and the accountant to ensure ongoing consideration of key external factors and how they connect to financial information and performance.
How to hire a strategic accounting firm
Strategic accounting can demand a different kind of expertise than your business might have on staff. This is where hiring for expertise can give you access to high-level, high-value accounting and financial expertise at lower cost than hiring and onboarding an on-staff management accountant.
Looking for a management accountant? XPECT can help. XPECT is focused on helping businesses optimize business strategy, enhance operational effectiveness, and successfully leverage accounting as a strategic tool, so that business leaders can focus on the strategic aspects of growing the business and achieving business goals. Learn more.