Accountant and Bookkeeper Articles

What is a Profit Center Expert?

The accountant/bookkeeper is a major cog in the business machine. Accountants/bookkeepers analyze key accounting indicators that assess a business’s profitability. If the accountant/bookkeeper shares that information with those who can make necessary modifications, profits will increase. This type of proactive accounting evolves an ordinary accountant into the Profit Center Expert. If you want to be a Profit Center Expert you must study key accounting indicators that will signal areas in need of attention.

Score-carding

In his book In the Black, Allen Bostrom, President and CEO of Universal Accounting, suggests “score carding” in order to monitor these key indicators. He explains, “score carding’ is a term used to describe the important, even critical, numbers that a business owner or department manager can quickly scan to get a feeling for how the business is doing, and how it will be doing in the future.”

Sit down with your supervisor to discover what information he/she would like to see on a regular basis. Be prepared to suggest indicators you find valuable. Once you identify four to five key indicators, you should tract them regularly. Scorecards should have a quick summary for marketing, sales, production, customer satisfaction, and cash flow. While key indicators vary business to business, some may include cash balance, current ratio, sales commission percentage, number of leads generated, and percentage of sales financed. See the example below:

Once you have this information you can compare data.

• How did this month compare with last month?
• This quarter vs. last quarter?
• This quarter vs. the same quarter last year?
• Year-to-date this year vs. year-to-date last year?
• Year-to-date vs. budget?

You can see how assessing this information enables an organization to make more profitable business decisions.

Once you have this information it’s important for you to communicate it with your supervisor so that it can be shared with other employees. It’s amazing how numbers improve simply because employees are aware of what’s being measured.

If you’re interested in advancing your career as an accountant or bookkeeper, or if you want to learn more about becoming a Profit Center Expert, enroll in Universal Accounting Center’s Professional Bookkeeper Program. The Professional Bookkeeper’s Guide to QuickBooks is another program that will help advance you in the accounting profession.

Learn about a Professional Bookkeeper Career

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