When and How to Grow your Company’s Accounting Function?
Accounting and finance are among the most vital aspects in managing a business. Without both, it would be impossible for you to run and manage your business and make it successful. Accounting and finance help ensure that internal and external stakeholders will always formulate sound decisions.
The two areas work hand in hand in communicating information that investors, managers and business owners need in evaluating the financial performance of a company. That said, it is necessary to set the best accounting and financial strategies in place prior to starting a business.
You also have to make sure that you have an expert Chief Financial Officer (CFO) who will ensure that your company functions at its best financially. To make your accounting function more efficient, here are some tips:
- Make sure it’s timely – The people in your accounting department should do their individual tasks in a timely manner. Note that you can save a lot of time and effort annually if you reconcile all your bank accounts at the end of every month. This is beneficial as it allows you to catch errors early and correct them right away. Reconciling accounts receivable and payable information to your statement of financial position is also necessary.
- Create monthly cutoff policies – These should be designed for recording and invoicing expenses. Make sure that everyone in the office adhere to the set policies. For instance, make it a rule to submit all invoices to the accounting department at a specific date each month. This will prevent delays in producing financial statements as there’s no need to make excessive adjustments or spend time waiting for multiple departments and employees to submit their expense reports and invoices.
- Process some items collectively – Avoid entering just one invoice at a time or doing a particular task one at a time. Set a schedule to do a certain task when you already have similar items to process. For instance, you may just process customer payments once or twice monthly. This can help you become more productive.
- Spend time reviewing the accounting systems you set – Make the necessary updates or changes if necessary. Note that these systems will turn to be inefficient over time, especially if you don’t monitor them often.
Find out if there are any labor-intensive processes that you can automate. You should also determine if there are any functions that don’t actually provide value to your business, so you can eliminate them. This will ensure that your accounting function will only retain the most valuable steps and processes.
Mentioned in this article are just few out of the many tips that you can apply to make your accounting function even more efficient. Fill your company with the most competent accounting staff and hire a good and knowledgeable CFO, so you can continue managing your company’s accounting and finance departments effectively.
Author: tempCFO Inc.