Marco Vargas’ Post

AVOID THIS MISTAKE: Taking your Accounting Department to the next level often requires that the current leader of the department NOT be allowed to sabotage the effort. I've seen this dynamic play out several times recently and it's always difficult to observe from the outside. Here's the setup: a General Contractor, Homebuilder or Remodeler knows how to build but doesn't know how to keep his books. So, with his business being small, he hires a bookkeeper. It's all he can afford in the beginning. Time passes. His business grows. Volumes double. Triple. Wow! Times ten! And issues begin to surface. The accounting of the business becomes increasingly complex. It becomes harder and harder for his bookkeeper to turn out timely and accurate financial statements. And he begins to ask questions that the bookkeeper simply cannot answer. In response, his bookkeeper cites and recites 100 excuses, played in a loop, as to why things are the way they are. And, in the worse of cases, the bookkeeper also works to convince him that the questions he's asking don't really matter, that the answers are obvious and that the company doesn't need to spend the time, energy, effort or money it would take for the bookkeeper to be able to answer such questions. At some point in this process, he decides to reach out to a guy like me. And here's where the real tension begins. The bookkeeper has been with him for years, through good and bad and fat and lean. But he now finds himself in a difficult spot; he has a bookkeeper who, despite his or her loyalty and long term devotion, simply is no longer qualified to serve as the leader of the Accounting Department. And placing someone in over the top of this long term, loyal incumbent is proving to be one of the most painful parts of owning his growing business (particularly true when the incumbent is a good friend, a relative or - worst of all - a wife, son or daughter). If anything I've written above sounds familiar to you, you're not alone. In fact, this issue is common for a growing business. Fortunately, there's a tried and true rule you should follow once you identify yourself as being in this situation: do not allow the incumbent to sabotage you as you work to take your Accounting Department to the next level. This will require that you personally lead the effort and that you personally be its principal point of contact. Don't make the mistake of (essentially) asking your incumbent to pick (what he or she will see, rightly or wrongly, as) his or her own replacement. Don't make the mistake of allowing the incumbent to tell you what you need or don't need; instead, dialogue with and get input and opinions from professionals like me. Bottom line: recognize and plan for the tension your desire to uplevel your Accounting Department will create. And don't allow the incumbent's own self interests to trump what your business needs. See www.ascendantvg.com for more info. Or contact me here. Best, MV