Accounting and creativity are two words that aren’t commonly used in the same sentence.
In fact, creative accounting often has a very negative connotation synonymous with “cooking the books” – using illegal means to hide money from the taxman or using a business as a front for criminal activity.
Accounting is also considered to be a very precise and detailed profession with no room for error.
After all, who wants an accountant who cannot balance the books correctly? This does not, however, mean that there isn’t some room for creativity in accounting.
The following areas of accounting allow for the show of a little creativity:
Looking at these features shows that accounting is not as boring as some people may assume.
Creativity is an essential part of any business and prevents stagnation, and room should be made in your business for more imaginative accounting practices.
It takes a creative mind to be able to analyse the accounts of a business with the aim of finding room for improvement.
Ensuring that the money entering a business is well spent while looking for areas where costs can be reduced can be one of the most beneficial services from an accountant.
For example, would outsourcing some services be more cost-effective than hiring a dedicated employee?
On the other hand, could hiring additional sales staff increase income?
Most businesses only go through this type of process when they already need to start cutting costs.
However, regular analysis of the business can provide greater value for the company in the long run.
Budgeting is critical to managing the spending in any business and needs to be administered carefully but also requires a little creativity.
Ensuring that each department receives the necessary budget to operate effectively is the primary goal of budgeting.
However, the practice can be enhanced by analysing which departments could use a greater budget in order to become more profitable.
For example, marketing is notoriously ignored or provided with a low budget due to the fact that it is difficult for accountants to see the direct value that marketing has for a business in the numbers.
Applying a little creativity in budgeting and overlooking the usual constraints can help a company get the greatest value from marketing or other departments in order to continue to grow and expand.
When selling a business or looking for new investment, it is often necessary to present the books so that a potential buyer or investor can see how profitable the business has been in the past and where there is room for growth and expansion in the future.
A little imaginative accounting can make the books look more attractive to these potential investors or buyers.
This practice of creative accounting is not illegal and not the same as cooking the books.
It simply involves moving money around within the business in order to show the potential rather than some of the less attractive aspects of the business.
Creativity in accounting may be exactly what your business needs in order to grow and prosper in a meaningful way that is sustainable over the long term.
We will provide you with the security, confidence and individual attention you and your business deserves. We’re experts with numbers, but we’ll never treat you like one!
Please call us today on 02 4987 2294 or contact us through our website.