Most accountants wouldn’t consider themselves responsible for managing workforce performance. But let’s pause and think about that for a second. When someone is feeling overwhelmed and under-supported at work, there’s almost always a financial factor involved.
Imagine a salesperson struggling to meet an increased monthly quota.
Or a manager who’s mentally checked out because she’s not being paid enough.
Or a warehouse employee cutting corners to get inventory out the door as fast as possible.
Or a contractor dragging her feet on projects because she’s still waiting for a check for her last invoice.
All of these problems can be traced back to accounting decisions: The business needs to increase sales to boost cash flow. There isn’t enough in the budget to give management a raise. Shipping delays cost too much money and should be avoided no matter what. Invoices need to be reviewed by multiple people and must be received before the 1st of the month in order to be processed for payment that month.
There’s a rationale behind each of these decisions. They all seem to save the business money by maximizing efficiency and minimizing unnecessary expenses. But each has a human toll and ultimately leads to significant costs downstream. Impossible quotas, low salaries, perilous working conditions, and late payments drag down morale and productivity. Their negative financial impact can far outweigh any upfront savings.
Plus, they’re just crappy ways to treat people.
Don’t be a jerk. Right now, it’s more important than ever for those of us in finance to consider how our decisions affect others. With so many people struggling to make ends meet, take care of their families, and navigate the challenges of working from home, we’re all trying to work more and complain less. The natural outcome of all that? Burnout.
In our previous article, we explored ways in which accountants can take care of themselves and avoid burnout when working remotely. In the spirit of paying it forward—and in the interest of keeping businesses running smoothly—here are ways financial professionals and decision-makers can make life easier for everyone else:
1. Identify the right KPIs.
Accounting runs on key performance indicators. From revenue and expenses to operating cash flow, working capital, current ratio, profit margins, and more, there are plenty of money metrics CFOs and other decision-makers pay close attention to.
But while purely financial KPIs are essential to business success, they don’t show the whole picture. Financial performance often comes down to people. Numerous studies demonstrate the link between employee engagement and business performance. Research by Gallup, for instance, shows that organizations with highly engaged teams are roughly 21% more profitable than the industry average.
For the sake of your people and your bottom line, you need to track human-centric KPIs such as the following:
- employee turnover rate
- retention/attrition rate
- absenteeism rate
- new hire time to productivity
- employee satisfaction index
- customer satisfaction scores
The better you can measure these kinds of metrics and connect them to straight financial numbers, the better visibility you’ll have into how your accounting department shapes workforce performance—and vice versa.
2. Find opportunities to save money without cutting staff.
Keeping people employed is expensive—which is why many businesses respond to economic downturns by downsizing. In the past few weeks, countless companies have furloughed workers or let people go. Uber, Disney, Under Armour, GE, United Airlines, Macy’s, The Atlantic—the list of organizations announcing mass layoffs is depressingly long and grows longer every day.
Many of these companies had no choice, of course. If your business is in physical retail or travel, there’s not really anything for employees to do during a pandemic. But if your employees can continue working remotely, they should be the last thing you cut.
This isn’t simply about doing the right thing. Layoffs tend to hurt everyone, perhaps most the employers who institute them. Consequences include more turnover, damaged customer loyalty, and low morale among remaining employees—not to mention the costs of severance, as well as potential legal claims if termination isn’t handled properly.
Accounting should work with executive leadership to find alternative ways to save money: selling equipment and unused inventory, renegotiating contracts with customers and suppliers, redirecting marketing spend, partnering with other businesses, and so on.
There are also numerous ways to cut employment-related costs without cutting staff. Eliminate business process inefficiencies, assign staff to different roles, or—if totally necessary—reduce hours or wages.
If you have unanswered questions about a Paycheck Protection Program loan or forgiveness for your loan, we have everything you could wish for in a guide on the PPP.
3. Budget with people in mind.
If your business is like most, you’ve tightened the belt. You’re spending less than you were pre-March 2020—perhaps drastically less. Maybe you’ve slashed marketing and business development efforts, instituted a hiring freeze, or taken one or more steps outlined in item #2 above.
Whatever your budget looks like for the next few months—however tight that belt—you need to be careful it doesn’t suffocate your employees. Humans don’t stop being human in crises. Deliverables will be late. Deadlines will get missed. Projects will require more investment than anticipated. People will need days off.
You need to plan for these eventualities by setting aside some money in your business budget. Accounting can help strike the right balance between total austerity and overabundance, and then adjust as necessary when the unexpected occurs.
4. Optimize payroll and AP.
This one’s an easy win. Your business can only benefit by paying people faster.
For one, employees and suppliers will be happier, meaning increased productivity and fewer management issues.
Moreover, you’ll remove costly obstacles from your accounting processes. I’m talking about time- and resource-intensive tasks (calculating hours by hand, corralling spreadsheets, printing and mailing checks) as well as the potential for human error and security risks.
There’s never been a better and more important time to automate payroll and accounts payable. And while you’re at it, why not simplify all of your tedious bookkeeping and accounting functions?
5. Get help from on-demand financial experts.
At inDinero, our team of expert CFOs, accountants, and tax managers are ready to help your business save money without putting your most important asset—your people—in jeopardy. We can support your existing accounting team with consulting and software, or act as your virtual accounting department.
If you need accounting, tax, or financial decision-making assistance, schedule a free consultation with one of our experts.
For free resources and guidance to help you manage your business finances confidently during these difficult times, check out our Coronavirus Business Resources Hub. There, you’ll find webinars and articles such as…
- Tips & Advice for Businesses During COVID-19
- CARES Act: 5 Things You Need to Know For Your Business
- Which SBA Loan Is Right For Your Small Business?
- Breaking Down The Families First Coronavirus Response Act
- Coronavirus Taxpayer Relief Updates
- Accounting Rules for PPP Loan Forgiveness
…and much, much more.
Quick Note: This article is provided for informational purposes only, and is not legal, financial, accounting, or tax advice. You should consult appropriate professionals for advice on your specific situation. inDinero assumes no liability for actions taken in reliance upon the information contained herein.