December 09, 2020
Risk is a part of the business but in the current pandemic situation, the scales have tipped even higher even as the capital in the market has fallen lower. This has become a time of not recruiting new people to do new tasks (all thanks to the falling demanding) but instead introspecting the multitasking abilities of your present staff or taking up the best offer available. Interestingly, many business owners fail to realise that their accountant plays a vital role in their business’ finances and can help them with not only effective cash flow management but also risk management. Therefore, an accountant can help with effective management of internal controls. After all, keeping the books is not all about records but about how cash is flowing from your business and when it comes in. Financial statements and strategies based upon this need solid facts and figures and these can be provided by your accountant.
Some food for thought – Whatever obstacles to success are out there, finance is not factoring on that list. Operations are the real killer to success as correct decisions, risks and goals in the right proportion lead to success and not just injections of capital. This is what it is in the long run. Considering it, one does view the current market in a new light.
Know Your Risk Appetite
An accountant would be more than just a sounding board. The task of an accountant as a risk manager is dicey as the first thing that needs to be worked out is the board’s risk appetite. What type and degree of the risk is the company willing to incur? Based on it the risk tolerance level of the company can be worked out. You cannot merely rely on the accounting team to do everything as the operational team to needs to add their inputs. Thus, based on how conventional or risk ready the organisation is a system that can be set up.
What Is ERM?
Enterprise Risk Management or ERM needs to be a part of your accountant’s mental build-up. It is a specialisation that needs experience and someone aware of how to manage and understand risks. Thus, it is not implied merely by an accountancy degree. This is where Doshi Outsourcing comes is as the ideal risk management and accountancy partner. We have skilled accounts managers who are capable of a proper risk assessment based upon your company’s profile. Thus, we can deal with your accountancy work as well as have a look at your risk management profile. Risk management is more of an advisory role and hence, needs a proper understanding of not merely the company’s accounts but also records and the experience of the accountant in risk management to counts.
Cash Flow And Risk Management Analysis
The pandemic has drained businesses immensely. So, paying business suppliers, keeping other creditors at bay and managing stock has become difficult due to the diminishing demands. Effective management of cash flow at such periods is of utmost importance. Also, by effective risk management, an organisation is at least made aware of the risks that it faces on the business front. There are three main factors to keep in mind for effective management of risks which are:
Treatment of risks is equally important as the business should not be taking undue risks whose consequences it is not prepared to face. Assessment here would not only mean assessment by the accounts manager but actually can only be done with the board and the leading team present. The management decides the risks and based on that the accountant can take over and make an assessment. The evaluation window factors in how much risk the organisation is willing to take on and also evaluates where it stands at present.
Hence, effective risk management is not everyone’s cup of tea. You need an accountant who has proper professional experience along with a good track record. Doshi Outsourcing can be of service here as we have a dedicated team of accountants who can assist with your risk management as well as aid in management accounts and cash flow management. We provide bookkeeping, VAT, payroll, taxation services as well as the basic accountancy ones. Thus, you have a team of dedicated accountants whom you can trust to deliver quality work on time.