Only one in 20 small businesses has accurate financial statements.
That makes up only five percent of businesses. Almost half of all small businesses experience some kind of accounting theft at their company, which costs them an average of about $114,000 per occurrence.
The Association of Certified Fraud Examiners puts out a report annually that is a giant eye-opener for how much fraud and theft is out there. The numbers are staggering–and it’s was one of the factors that led CEO Matt Garret to found TGG Accounting. Small business accounting can help mitigate these threats.
In an interview with Stay Wealthy San Diego, Garrett shares the story behind TGG and how it’s turning traditional accounting on its head.
Small business failure rates are abysmal
This is due to the fact that small business owners don’t have access to the same information that large companies have. Large enterprises base their business decisions on the financial information that they gather, whereas many small businesses overlook this.
Fortune 500 companies have robust accounting teams. If you compare them to small businesses, they contrast greatly. At every level and in each department, there are elaborate tracking systems that monitor information so that management can look out for key performance indicators.
This information is always accurate and on time because accountants are constantly updating it. This is what allows executives to make critical business decisions and grow their companies year after year.
A new approach to accounting
There is an information gap hindering small businesses from achieving the same level of success as bigger companies. Garrett’s mission in creating TGG was to “educate business owners on the value of accurate accounting” and give them really good information to base their business decisions off of, to start to give small business owners control and the opportunity through the numbers.
One of the biggest challenges in running a business like TGG is that we have to teach accountants how to do accounting. As soon as they graduate school, the best accountants think that the best possible jobs you can get are going to “the big four” accounting corporations. When working with these companies as an accountant, you have to decide whether you will specialize in tax or audit accounting.
The problem in siloing the two is that if you go into tax, within 6 months you will have forgotten most of the accounting you learn in school because you’ll never use it again.
Tax accounting is really just an exercise in studying tax law. On the other hand, if you go into auditing, you’re unfortunately prohibited from giving any kind of advice to your clients because it crosses ethical boundaries. In short, they’re not helping any business owners with accounting.
We have to bring in these talented, really smart accountants and train them. We show them that if they want to make a difference in people’s lives and not just improve their own career track, then TGG is the place to come.
We’ve developed an incredibly robust training program where we run about 250 training sessions a year. These programs cover everything from accounting software to excel to communication training. We make sure that our accountants are equipped with the necessary skills to help small businesses succeed.
Listen to full the podcast and learn as Garrett shares his tips for entrepreneurs and small business success.