Your accountant is not late, you ask too late

At a retailer we worked with, four months passed between the end of the financial year and the moment the numbers were on the table. That is not exceptional. That is simply how it goes.

Now do the arithmetic. A problem that starts in the second month of that financial year does not come up for discussion until fourteen months later. Fourteen months in which you carried on exactly as you were, because you had no reason to do anything else.

The accountant usually gets blamed for that. Wrongly.

What your accountant actually does

An accountant makes sure your numbers are right. That your filings are correct, that your closing closes, that you are compliant, that your balance sheet gives a true picture. That is precise work and it has to be right down to the euro.

That kind of correctness takes time. Invoices have to be in, credit notes processed, stock counted, depreciation booked. Four months is not slowness, it is the normal lead time for work that is only allowed to be right.

The problem is not that those numbers arrive late. The problem is that you use them for something they were never built for.

Bookkeeping is accountability. It looks backward and it looks at the whole. Steering is a different thing: it looks forward, it is allowed to be approximate, and it has to be now. Confusing those two is the most expensive habit in most smaller companies.

What happens in the meantime

In the months when you see nothing, plenty happens. And rarely anything spectacular, which is exactly what makes it hard.

Indexation is the best example. Of your rent, of your wages. In Belgium wages rise automatically with inflation because the law requires it, a mechanism most countries do not have at all. It is never a shock, it is a few percent each time. A silent killer. You do not notice it in one month, you notice it over three years, and by then it is baked into your cost structure.

The same goes for seniority. A team that stays stable gets more expensive every year without anyone joining it. That is not a problem in itself, experience is worth something. But it is something you ought to see coming instead of discovering after the fact.

I only understood that myself when I saw it in a chart. Twenty-five years in retail, and the cost line that crept up most quietly was the one I looked at least.

The number that surprised me

At that retailer, the first full analysis showed something nobody had expected. The gross margin was rock solid and stayed stable, even when purchasing behavior changed. With more purchasing, gross margin fell far more slowly than purchase cost rose.

That is counterintuitive, and it runs straight against what most owners believe. They think: more purchasing means more stock, and stock sooner or later has to go out at a discount. So buying more means giving away margin.

In this case that was not true. The margin held. Which meant the problem was never in sales but in costs. And that you should not buy more cautiously but more aggressively, because volume fed straight through into gross profit.

That is not an insight that comes out of annual accounts. It comes from laying purchasing, revenue and margin side by side over a longer period, at a level of detail a year-end closing does not preserve.

Numbers as an argument at the table

There is another reason to have your own numbers, and it has little to do with bookkeeping. Negotiating.

When I had to renegotiate rent, I did not walk into the landlord's office with my profit and loss account. I walked in with the footfall figures of the shopping center. The drop in visitors, made visible across the years. That is a conversation about a fact instead of about a feeling, and it goes very differently.

The same logic works with suppliers, with banks, with a potential buyer. Whoever knows their numbers at the level the discussion is actually held at has the stronger position. And footfall is not an accounting item, it sits in a completely different source.

What you need in order to steer

Not much, really. Certainly not a second set of books.

You need your sales data at day level, your purchases at invoice level, and your cost lines per category and per supplier. Out of your ERP or your point of sale system, pulled automatically, without anyone having to export something every month. At the retailer in question that now runs forty-eight times a day.

Then you do not have to go looking any more either. A deviation above a threshold simply sends a signal. That is the difference between numbers that sit there and numbers that do something.

And your accountant? He carries on doing exactly what he always did, only with a client who knows his own numbers before the conversation starts. That makes the conversation a lot more interesting too.

The five numbers I would check every week

If you start tomorrow and you do not want to drown, keep it to five.

Absence, because it is the most underestimated cost and the earliest thing to tell you something about your organization. Cash flow, because profit on paper does not get you through a month. Gross margin, because that is the number you can actually turn. Revenue against your target, because a revenue figure with no target beside it says nothing. And footfall, the number of people walking in, because without it you never know whether a bad week was you or the street.

Those five together tell you within a week whether something is shifting. Your annual accounts tell you fourteen months later, and even then only that it shifted, not why.

The claim

Your accountant is not delivering late. You are asking late, and you are asking the wrong source.