When you hear “accounting system” your mind probably drifts to things like budgets, forecasts, and meeting your sales goals. Understandably so, considering they are some of the core pieces of running your business and when they are successful they lead to strong financial results.
But did you know your accounting system can stand as a point of reference for improving team accountability too?
Because each aspect of your system shows what areas of your business are doing well and what areas need work, they can all be related back to team performance and used to hold them accountable.
Aspects of Your Accounting System that Lead to Team Accountability
To keep it simple, we'll specifically focus on three aspects of your accounting system that can be used to promote team accountability.
Budget
Forecasts
Sales Numbers and Goals
Your Budget
When you and your team create budgets, you are relying on previously collected data to create a spending plan for the year ahead. The budget will guide you through spending, effectively pushing you closer to your goals.
However, a budget can’t succeed unless the whole team is on the same page. A well-functioning team has a strong ability to adhere to a budget, which keeps them accountable by ensuring there is no spending outside of what was planned.
But for your budget to be a strong accountability tool, you must:
Clearly define the team's desired outcome and how you measure their success. Document it.
Make sure you understand the skills, time, and resources needed to achieve that success.
A budget built on data analysis pulled from previous years' accounting combined with a forward thinking financial system makes this happen.
Have a system in place to measure performance incrementally.
This allows for recalibration if things get off track. Financial tools like QuickBooks help small businesses track revenues, expenses, and cash flow as you go and provide information in easy-to-understand reports, so you don't have to wait for end-of-the-quarter or year surprises to identify discrepancies and re-align with your goals.
Provide regular feedback based on the accounting. Make accounting your priority.
This is the only way you can provide feedback timely enough for teams to do something to get back on track.
Don't let teams slide by.
People push boundaries if you don't clearly define them. Make sure there are consequences of going over budget. At the same time, make sure you reward teams that achieve team goals while coming in under budget. Too often, the opposite happens. Cutting a team's budget the year after they come in under budget is punishment for performing well. It encourages overspending the following year.
Your Forecasts
A forecast is essentially an expectation for the year ahead. Your team should strive to meet expectations.
Periodically check in on your forecasts and compare them to your actuals, they should closely match. If they don’t, it will clearly show you where you are struggling. When you’ve pinpointed your areas of underperformance (or in some cases overperformance) and you and your team can make the needed adjustments. This ensures everyone is staying on track.
Further align your forecast to your actuals to nurture accountable behavior by:
Making people individually responsible.
It's easy to shirk responsibility when people are collectively accountable. By making individuals responsible, you are holding each person accountable, not just the entire team.
Adopting an "embrace your mistakes" mentality.
Nurture a growth mentality where people feel comfortable admitting their mistakes and learning from them. If something doesn't get done or done correctly, it’s important you have a team environment where a person stands up and says, "that was my responsibility, here's what happened, and here's what I'm doing differently to make sure it's done right going forward." That's accountability!
Leading by example.
To create this kind of ownership of mistakes, teams must see leadership owning theirs and using what they’ve learned to improve team function.
Your Sales Numbers and Goals
You’ve likely created sales goals for your business based on data. If you aren’t reaching these goals, there are obviously areas where you could improve.
If this is the case, turn to your actuals. The comparison can be used to hold your team accountable. It will give you clear direction for taking action in struggling areas.
When you use your sales numbers and goals to hold your team accountable, it helps you identify and make the most of:
Which sales behaviors produce the desired results.
How to best segment audiences to nurture leads and close new accounts.
Where you can streamline operations to eliminate barriers to results.
What tools your sales team needs to close deals.
For example, investing in sales automation may help salespeople more consistently meet individual sales goals.
How marketing can better align with sales and offer sales-enablement resources.
Repeatable systems that work.
Coachable moments.
Your Accounting Partner
To achieve a high level of team accountability through your accounting systems, you need established processes centered around supporting your team.
An experienced accounting partner will help you develop and manage these systems and processes, as well as keep you and your team focused on your goals through accountability.
Looking for a trusted financial partner? Contact SIMPLY Financials PLUS.