Supply chains have been on the fritz for a while now, and we can expect these disruptions to be with us for a long time, given their complexity and ubiquity. That means it’s more important than ever for businesses and organizations to implement new ways of planning for what they do and don’t know.
One root cause of these supply chain problems comes from an understandable impulse toward increasing profit margins. Over the last several years, logistics companies and company leaders have found opportunities to limit redundancies and cut costs when it comes to moving goods around the world. Unfortunately, this push toward efficiency has created difficulties for consumers downstream as suppliers struggle to cope with current realities.
Now even businesses that are several steps removed from the supply chain are having more trouble predicting cash flow and profitability. That doesn’t mean local and regional businesses are helpless, however — and accountants are in a strong position to help.
Two expert CPAs spoke with the Journal of Accountancy about methods companies can use to stabilize their books going forward. Accountants can help clients in any industry figure out the legal, regulatory and financial complexities of straightening out supply chain disruptions; they’re also trained to help businesses ask the right questions about where the issues lie.
• Networking: Because of their familiarity with the ins and outs of industries and specific sectors, accountants know how to seek out expertise in places that a layperson — even within an industry — may not know about. This might mean government agencies, private vendors, academics or simply their own trusted connections.
• Diversifying: The principle above can work within a business as well. Ask your accountant about mapping out processes and supply chains from those who deal with issues most directly. By gaining a deeper understanding of a company’s inner workings, businesses can position themselves to work around systemic roadblocks.
• Monitoring: While business leaders may have a good handle on the specifics of their own industry, an accountant can synthesize big-picture news and data that give context to more specialized knowledge. Consider reexamining how your leadership tracks financial and international news; your accountant can offer guidance on choosing your sources wisely.
The immensity of what’s going on with supply chains might be daunting, but it’s possible to position yourself and your business in a way that cushions your enterprise and sets it up for short- and long-term success. Feel free to get in touch with our team at SBF to start a conversation about managing your company’s financial health.