I’m Not an Accountant, but I Play One at the Office

Those of us who have owned and operated small businesses understand a few essential truths:

• Buying accounting software doesn’t make you an accountant.


• Hiring an accountant doesn’t mean you’re managing your books.


• And understanding the two points above won’t necessarily make your business profitable.

Fact is making your business successful is tough without personally managing your profit and loss (P&L) statement. It comes down to data, CompTIA CFO Dave Sommer told Breakaway attendees this morning: “You really can’t manage your business unless you measure it.”



Sommer was leading the “Business Foundations Training: Managing Your P&L” session, part of a new CompTIA educational series for VARs and MSPs.  Sommer said the reasons for rolling up your sleeves and diving into your books amount to one point: It makes your job easier.  As the leader of your company, you wear many hats – and they all will fit better when you understand your revenues versus your costs.  Knowing the ins and outs of your P&L not only improves cash flow, but it also guides your investments in the business and facilitates your company’s growth.  Even employee relations can be improved when you know how thick or thin your profit margin is.

Sommer, a CPA with an MBA and more than 20 years of experience managing technology businesses, spent much of the session delving into the specifics of analyzing a chart of accounts – which won’t be regurgitated here.  But there are some Sommer tips that are readily digestible for those of us who count beans only occasionally:

• If you’re a VAR or MSP, you’re not a dry cleaner.  So, don’t set up your chart of accounts like one. “The most frequent mistake small businesses make is making their chart of accounts too general.  Don’t leave the design to someone who doesn’t know your business,” Sommer warned.  There are templates available to help you from organizations such as Service Leadership Inc. and Corelytics Inc.


• Start with understanding gross margin – the difference between revenues collected and costs expended – but don’t keep it too simple.  Collect data at the product and service level and/or line of business level.  You’ll want to examine the whole dollar amounts as well as the percentage changes over time – monthly, quarterly and year-to-date.


• Benchmark margins against industry peers and compare at the same levels – product/service and line of business.  But Sommer said not to forget another basic truth of business: “Benchmarks comparisons are only as good as your data.”

A 60-minute session can only scratch the surface of most realms of accounting.  That’s why CompTIA launched the Business Foundations Training series.  And why CompTIA members receive a free year-long trial of Corelytics™ Lite.