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Rock-Solid Variance Analysis
This is something that is used in just about every industry out there, when the company has to utilize outside sources for their materials/equipment. Having this type of analysis done is what will help you understand the reason for the projected difference (whether it’s more or less) and show you how operations can be improved to make the necessary changes.
Sounds good, but I still don’t get the concept of a variance analysis!
Simple enough. This is an accounting subject that can be hard to grasp for some, so you’re definitely not the only one who needs to go more in-depth to gain a full understanding of how it plays a part in business.
Let’s say that something is project to cost you only $30,000 but it comes in at $39,000. The variance in this is an expense overage of $9,000. Once that kind of variance is discovered, it is then investigate further to understand whether the budget needs to be adjusted or new processes would do the situation justice.
Here’s what you need to know about hiring a pro for this task.
There are countless CPA firms out there, especially when it comes to providing accounting services such as variance analysis. The market is flooded with companies, but how do you know which one is the best?
It’s not as hard as you might think, just ask yourself:
First and foremost, what do you seek from a CPA firm?
Knowing what you expect from your accountant is critical to ensuring your overall satisfaction with the services that they’re trusted to provide. Does your candidate fulfill your expectations or do you need to look elsewhere for the needed approach?
Get them on the phone, do they live up to their reputation?
There’s a big difference when it comes to using the phone over email and you’ll see it immediately. Call them up to see if they answer, and provide you with the needed help while ensuring that they live up to what they claim. If they don’t this should be considered a red flag and you might be better off finding another CPA firm to do business with.
How long have they been in business and what are their accomplishments?
Their history will tell a story that you might otherwise not have the opportunity to learn about unless you were to do your own due diligence. Have they been in business for years or did they just open up their company? What kind of things have they been able to accomplish during their existence within the ever-so-competitive accounting industry?
Is there any type of guarantee to ensure that they’re accurate?
If you’re going after professional assistance, you don’t want to have to deal with burdensome mistakes commonly seen among the industry’s amateurs. You want to make sure they back their numbers while protecting your investment into their accounting company. Do they have a guarantee in place, and what are the details regarding it?
When you need help, who can you call upon for a solution?
You don’t want to get left in the dark, and unfortunately there have been many untrustworthy companies in the past who have done nothing for their clients but that. They show up when you have money to shell over, do the bare minimum required, and then disappear like a ghost. You don’t need this kind of risk when you’re trying to build a business.
How often is a variance analysis needed?
The need for this type of financial analysis is really on an “as needed” basis but you want to make sure that you have processes in place to detect any variances as they occur. The working capital is the lifeline of your business, so you must stay on top of it at all times.
By now, you’re probably wondering how you can make your processes as efficient as possible to ensure proper detection of variances within your books. We may be a little biased (since we do work here), but we think you should…
Choose the Better Option: Partner with GLG Accounting
We continue to have priceless victories when it comes to ensuring every one of our clients’ needs are fulfilled in a timely manner. GLG is dedicated to providing you with ongoing support as required by you, and the industry’s most efficient accounting processes. Why should you risk messing with an amateur when you have a cutting-edge accounting firm right in front of you?