Proper Accounting Practices Can Account for Greater Success
One of the educational sessions held during Honeywell’s First Alert Professional Convention at the JW Marriott Orlando Grande Lakes Resort Nov. 13-16 was “Ensuring Your Company’s Financial Health.” The class, led by Scottsdale, Ariz.-based Safeguard Security and Communications CEO and SECURITY SALES & INTEGRATION‘s Editorial Advisory Board member John Jennings, reviewed the critical components of a security company’s financial statements.
This 75-minute session was brought alive by
John Jennings used his company as an example to illustrate sound security finance practices.
“You can’t track what you cannot measure,” said
Some of the key calculations: Current Ratio (Current Assets / Current Liabilities), which Jennings said was the most important ratio; and the Creation Multiple (Net Installations Loss / RMR Created, which he said, “You’re OK with a figure of 20 months or less for your creation multiple.”
Among the other sage advice offered up by
Hopefully some of the sound financial management techniques featured in this course sunk in with most of the attendees, despite the security industry’s roots as small, entrepreneurial operators who may possess keen instincts but not necessarily formal business accounting expertise. Although an industry veteran I spoke with afterward said, “You know, that’s all well and good but I have always just fine doing things my way. Why change now?”
To forge deeper into the mind of
As always, thanks for reading.
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