Is Your Financial Reporting on Target?

While your P&L paints a broad picture of financial viability, it may not be telling you the whole story.

Too often, businesses have a financial reporting structure that makes it difficult to identify what’s driving results. The chart of accounts is either too large to make decisions or too small to see areas of improvement. Optimizing the chart of accounts allows business owners to structure data in a way that allows key performance indicators (KPIs) to be tracked and measured.

Establishing the right KPIs depends on understanding business profitability by department, location or business unit. At Kirsch CPA Group, we go beyond a simple P&L structure to provide an accurate picture of profitability that leads to more effective strategies.

Here’s an example.

Case Study: The Key to Business Growth Was Hiding in the Data All Along

One client came to us seeking a review of their financials with the goal of maximizing the value of five franchise locations. An initial review led us to suspect that their profitability was threatened by specific locations, but their financial data wasn’t structured in a way that allowed them to see it.

The Kirsch team took their QuickBooks file and restructured it to provide transparency into each location. The results confirmed our initial theory and, by closing down four unprofitable locations, our client saw a return to profitability. The review also revealed the fact that their most profitable locations are in rural areas where consumers are less likely to buy products and services online.

Keep to the Path with KPIs Aligned with Your Goals

When you don’t have the right KPIs or financial data structure it’s easy to invest money on projects and ideas that don’t have long-term value.

Here are some examples of KPIs that can be used to shine a light on your genuine profitability.

Ensure Effective Financial Reporting

Whatever your business goals, the Kirsch team has deep experience in providing forward-looking financial and advisory services that will help you get there faster. We specialize in helping small and mid-size businesses and nonprofits create the strategies, financial structure, KPIs, and reporting that drive growth and profitability. Speak to one of our CPAs to get started.

Contact us to learn more about our accounting advisory services