15 Oct Easy Ways to Reduce Financial Liability
It is all too often that companies can become embroiled in lawsuits, even when they don’t necessarily intend to violate any law or do any wrong. There is such a complex web of financial entanglements involved, particularly involving the tax code, that all but ensures that most businesses will not be able to successfully navigate these complex procedures solely based on the strength of their in house talent. This means they often need to turn to outsourced accounting firms to help provide them some extra oomph and help them reduce the risk of being financially liable in certain situations. Here are some of the best tips on reducing your financial liability:
• Get rid of high risk clients/troublemakers – Follow the Pareto principle. Most of your profits likely come from a few high value accounts, and most of your problems likely come from a few perennial troublemakers. If you are able, slowly wean your account book of difficult clients, and focus on retaining those who actually generate good margins for your business.
• Train middle management – Unless your company is incredibly small, you likely have a group of people in between executive management and your actual employees. Failure to keep these people (supervisors, middle managers, whatever you may call them) up to date can result in huge losses of efficiency for your business. Train your personnel in your procedures properly!
• Toss the cookie cutter approach – Outsourced accounting businesses sometimes fall in to the trap of offering cookie cutter advice to some of their clients. That isn’t to say the advice is necessarily bad, but it does reflect a certain lack of desire to really delve into the particular circumstances of an individual client. Try to focus on offering custom tailored solutions, which focus on the actual circumstances your clients face.
There are many other ways to reduce financial liability, but these are definitely a great place to start. Companies need to also do many other things, such as implementing good quality control procedures throughout their business, make sure their practices and books are audited regularly, and many other things, but following these simple tips is a great way to start when you begin looking for outsourced accounting services.