I spent 10 years in Finance & Accounting

Hello hello,

Welcome to Monday’s edition of nerdy accounting things with Alice. I thought you’d find this email interesting.

A lot of people thought I was going to leave accounting and finance forever, and while that is my preference, I also know that this is my biggest USP in the market.

One cannot just throw away 10 years of this experience and pretend like it never happened.

So now I am figuring out how to package my knowledge towards my new direction as a Youtuber, agency owner and a B2B growth marketer..

But enough about me.. here are the TLDR notes on what qualifies me to write this email.

• I worked several industry positions from junior accountant to Corporate Controller of a $20m SaaS company).

• Audited a PE firm based in Vancouver with a $4bn TAM and consulted for various publicly traded companies north of $350m in market cap (mostly mining and forestry).

#1 - The best companies I’ve seen (financially) are the ones that hire, train, and retain top talent throughout the whole company.

This may sound very cliche, but how you do anything is how you do anything. It’s very unlikely that Finance will be a great function if the rest of the company is not.

Even the most talented Chartered Accountant in the world will struggle at a company filled with C players, mismanagement and poor culture.

#2 - A good finance function is run just like any department in the business

The purpose of a Finance team is to generate timely and accurate data for management to make decisions on.

This includes both historical data (accounting) and strategic data (finance).

Historical data is generated based on principles, otherwise what we call GAAP accounting.

Strategic finance requires understanding of the business, suppliers, products, services lines, etc.

How is this done?

Having clearly laid out SOPs, processes, documentation, checklists, deadlines, staff training, etc.

#3 - The most talented accountants I have ever met are exceptionally well rounded.

When I say well rounded, I mean they are meticulously detailed with numbers but also have the soft skills to excel in a workplace. Most people naturally lean on one side more than the other.

The soft skill I’m speaking about is the ability to handle and communicate with all types of people and build relationships both internally and externally.

These are the ones that typically get promoted quickly and move into leadership positions at a young age.

#4 - Business comes down to margins and cash flow
Cash flow > profitability > revenue

I personally believe that it all starts with prioritizing margins and cash flow.

Sales is the bloodline of business but how and when that money comes in, and how it is allocated, is just as important as the sale itself.
 
Profitability is important because it affects valuation (a lot of companies are valued based on EBITDA). In a small business the owner will usually want to take out a dividend, which is done out of after-tax profits.

#5 - KPIs, metrics, are all extremely industry and company-size dependent.

• A SaaS startup’s main priorities are their cash flow and burn rate. Then they would track metrics like MRR, LTV, CAC, and churn.

• A furniture store should be tracking their gross margin per product, order lead time, and inventory turnover.

• An accounting firm that charges on a billable hour model with payment terms would track LTV, employee utilization, and A/R days turnover

That’s all for today. Stay tuned for more 🙂 

Alice

P.S. I recently started posting more business content on Linkedin (I’ve committed the time and resources to growing my account) so follow me there if you want to learn more.

P.P.S. I have 3 long form videos scheduled to drop on Youtube this week. Really trying to level up my videos with better branding & professional videography.