When a company is struggling, engaging in accounting turnaround services may help the organization shore up its ability to stay in business. As any company embarks on this journey, there are five steps in a turnaround strategy that make the difference between those companies that succeed and those that struggle.
1. Analyze: Take an objective look at the business
Effective leaders are willing to see the organization with all its flaws. They ask hard questions, challenge assumptions, and seek clarity even when the answers are uncomfortable. This discipline allows them to act decisively and strategically. Assess the business honestly with the answers to the following questions:
- Do your current financial statements / reporting mechanisms accurately report the current state of the organization?
- Do you have all the information you need to make decisions quickly?
- Do you have any customers, vendors, or employees that are putting the business at risk?
- Could an experienced outside perspective help you navigate the challenges?
2. Action plan: Be decisive about making changes (or not)
Many leaders may begin to feel paralyzed, unsure which decision will lead to the best outcomes. Like all business decisions, it’s important to gather all the data you need, listen to those you trust, and then make a decision. After looking at the answers to the questions above, consider:
- Do I need to make difficult, but necessary, changes to my organization?
- Is it time to sell, divest, or close my business?
- Is it time to engage a business turnaround consultant?
3. Implementation: Act quickly and prioritize reporting
To achieve success, it's important to act promptly. Waiting too long to make changes reduces your available choices. Even brief delays — just days or weeks — can increase costs, cause more disruption, and decrease your chances of success.
Building good financial hygiene doesn’t happen overnight. One of the most effective tools an organization can have to drive accountability during a turnaround period is a detailed reporting dashboard. Organizations that regain control do so by measuring the right data and acting on it. Ask yourself:
- Can my team provide me with the information I need quickly?
- Does the information on my dashboard provide a clear picture of our financial health?
- Do I have the relevant metrics for my organization or industry?
- Does the dashboard drive accountability?
4. Roadmap: Assessment and what comes next
As you review your reporting dashboards and start to drive accountability, you’ll see the impact of operational changes and financial decisions in real time. By continuously evaluating progress, you can validate that you’re on the right track and make more adjustments as needed. The ultimate goal is ensuring sustainable results and reducing the likelihood of recurring issues.
Talk to an expert about your business turnaround strategy
The best time to bring in a turnaround accounting expert is as soon as warning signs appear, including financial losses, declining performance, or inefficient operations. This outside consultant can help you establish a true baseline of where your company is and craft a plan to help you get to where you want to go.
Mowery & Schoenfeld’s practice is designed to support your business as a trusted partner, providing personalized guidance and support based on decades of experience. Learn more about our turnaround services