There are a bunch of symptom which are often associated with financial stress.  They don't always indicate financial stress, and the signs vary, but if there are symptoms which have you wondering, it is worth checking them out.

Lack of reports
The accounts department is responsible for more than processing transactions. It is also responsible for financial reporting: past, present and future.  It is critical that owners and managers get timely accurate information about the financial performance and position of the business.  If those reports are not being provided, there are a few possible reasons.  One is deliberate control of information, another reason is a lack of resources, a third could be poor systems.  Whatever the reason, it should be of concern to owners and managers alike.  Do not ignore this warning sign, it indicates that managers are managing in the dark.  If requests for reports get increasingly curt responses, the accounts department needs help to solve this problem.

Out of balance reports
If you are reading financial reports which do not balance, there is something wrong.  The 'Net Profit' on your Profit and Loss report should balance to the 'Current Year Earnings' on your Balance Sheet.  The Aged Debtors report should balance to 'Debtors' in your Balance Sheet. The Aged Creditors report should balance to 'Creditors' in the Balance Sheet.  Owners should ask to see a bank reconciliation every now and again, and check it agrees to the 'Cash at Bank' value in the Balance Sheet.  This problem is unlikely to occur if you are using MYOB or Quickbooks.  But look out for 'Historical Balancing' in MYOB or any inexplicable accounts with balances.    

Grumpy accounts staff
Once you think about it, it is obvious.  Accounts staff bear the brunt of pressured cash flow.  Creditors hound them, owners and managers want up-to-the-minute updates of cash flow, they are asked to keep the financial situation confidential.  On top of that, it takes a lot more time for an accounts person to do their job when there is a shortage of cash.  Rather than paying accounts when they fall due, they have to negotiate with creditors and pay in instalments, which causes a transaction to be handled several times.  If the accounts staff in your organisation have become grumpy, you might want to take a closer look at the financial health of your business.

Divisions amongst staff or departments
I have seen this strategy used by an incumbent accounts person to 'divide and conquer' managers, thereby discouraging questions of accountability.  It alarms me how effective it is.  The way it plays out is the accounts person (bookkeeper/accountant) is grumpy, and discourages managers from other departments (eg sales, human resources) from asking questions.  At the same time, the accounts person is charming, flattering and conspiratorial with the owner/senior manager.  When other managers take their questions or concerns to the owner/senior manager, their concerns are dismissed.  The accounts person has convinced the owner/senior manager that everything is fine except for the incompetence of other managers.  They can even set it up so the concerned manager appears foolish, interfering or dishonest.  Having too much trust in the  accounts person, who is only accountable to the owner/senior manager can be a dangerous situation.  There might not be any reason for concern, but if this is your situation I would strongly recommend having someone come in and take a look around the accounts.



If you are experiencing these sort of symptoms, give me a call, there might be a simple way of fixing the problem before it develops into something nasty.
Kylie 0410 446 003

 more to come