Recent financial scandals among businesses and corporations have led to extreme distrust in America’s businesses. Today’s consumers are more hesitant to contribute to the financial success of businesses they feel of unethical and dishonest. In an effort to increase financial transparency among businesses, the government has implemented several new laws and financial reporting regulations. While these changes may seem like an inconvenience, they are actually beneficial to the long-term success of your business.
Financial transparency can help your business build and maintain trust with its customers and financial partners. When a customer knows that you are spending your money ethically and responsibly, they are more inclined to support your business through the purchase of your products and services. While it may seem instinctive for companies (particularly private companies) to keep sensitive financial data such as employment numbers and growth plans away from the public, sharing information about your financial performance is actually to your advantage.
When you are forthcoming about your business’ financial performance to your business partners, you minimize the risk of having your business as a partner. Having fewer unknowns can also increase your success when it comes to supplier relationships. By sharing your financial information with your suppliers, you might be able to delay payments to vendors by 30 days instead of having to pay in cash upon delivery. When your suppliers see that you can be trusted with a line of credit, they will be more flexible when it comes to payment.
Some companies have even seen an improvement in their bottom line increase after adopting internal financial transparency policies. Sharing financial information with your employees may be uncomfortable at first, but many companies are saving money because of it. When your employees see how their actions impact the company’s bottom line, they have an incentive to make changes and stick to their department budgets. By increasing your financial transparency internally, you are giving your employees the tools they need to stay on track and keep your business profitable.
If your business is interested in building the trust of its suppliers, partners, and customers, consider being a little more transparent with your company’s financial information. When your partners and customers see that your company is financially stable, their confidence in your brand will increase. Read our blog for more tips on increasing your business’ financial transparency through effective financial reporting.
Do you need help becoming financially transparent? Are you looking for an accountant to help you better manage your company’s finances? Beck & Company’s CPAs are available to assist your company with all of your financial matters – from helping you create more effective financial reports to assisting you with your tax returns. Give us a call today!