Few things can give a business the kind of stability that an efficient accounting department brings. While it may not bring in any revenue on its own, a well-run accounting team multiplies the profit on every sale your business makes. And by ensuring compliance with regulations and providing timely information, they help the company cut any costs that can be avoided.
When running a small or medium enterprise (SME), however, it can be difficult to keep tabs on your accounting team all the time. There are other aspects of business that need minding and with urgent requirements, it’s tempting to let accounting carry on as long as it gets the job done—even if that’s below peak performance.
But while it might not be obvious, each month that your accounting is simply “getting by,” you’re losing profits that could be helping the business improve. So keep the following in mind when evaluating your accounting team’s efficiency:
The simplest test is this: is Accounting meeting its deadlines? This includes submissions in compliance with regulations, as well as deadlines for internal reports. Missing the first could saddle you with fees, while missing the latter inhibits your ability to make informed decisions.
Punctuality stems from well-established processes. If a process is reliable, it will show not only at each deadline, but during the time in between. If your accounting team can easily provide status updates and projections on their responsibilities—backed up by results, of course—then you can rest assured that the system is working.
Reliability, not Redundancy
Even good processes can fall apart if there’s no one to carry the out. A good accounting team, however, will have contingency plans ready to ensure it can stick to its goals.
An efficient team should be composed of members who can fill in for each other at a moment’s notice. This can be maintained with a little cross-training, good communication, and a proactive interest from each member in the duties their colleagues perform.
That said, it’s important not to let reliability turn into redundancy. Make sure that cross-training employees doesn’t take up more time than the corresponding value demands. Similarly, this sort of preparation shouldn’t blur the lines of duty: each member should still be focused on their role, even if they can perform others competently.
Ultimately, you want to keep your accounting team tight. This is a matter of deciding how much you need to invest in various factors, like additional employees or training and education for current ones. That said, two options that all SMEs should consider are digital accounting tools and outsourced services.
Digital accounting tools now run the gamut from data entry all the way to analysis and reports. Cloud-based software has the added benefit of being accessible for anywhere with internet service and open to collaboration. When choosing software, look for ones with readily available customer support to ease the learning process.
Outsourced services can similarly be used to save time. The main draw here is that providers of outsourced services take it upon themselves to keep up with tools and trends in order to maintain their competitive edge. As you free up your internal team’s time to deal with core tasks, you also benefit from the service provider’s expertise in the processes you enlist them for.
Finding the balance for your company will take some trial and errors, but it will be effort well spent, which will pay off time and again.
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