By Tracy Watson

What is that one thing that differentiates a successful business from an unsuccessful one? Well, you may say that there can be multiple reasons behind the same. However, if we talk about the crux of any organization’s failure or success, it is nothing but the way a business manages its operations. There are some operations that are more crucial and need more attention and effort, and one of such operations is that of accounting and finance.

Accounting operations are aimed at providing valuable financial insights to business stakeholders: creditors, investors, and management to enable them to devise appropriate financial strategies and make timely informed decisions. The role of accountants holds immense importance in business management as they are not only the ones who collect financial data to prepare financial reports but also interpret the data, along with suggesting solutions to address financial problems. In short, management accounting supports running a business smoothly, and financial accounting lets you know how well it is running. So, let’s get started and know how can businessesmake their accounting and finance processes proficient to succeed in the long-run.

Top 9 Tips to Streamline Accounting & Finance Operations

• Focus on Your Receivables

Having a positive cash flow is the only way a business can function properly, and this happens when the accounts receivable process gets managed appropriately. Make sure to issue invoices on time and send timely reminders to customers for making payments. Keep track of the invoices that are paid and maintain proper records regularly of the same so that the reconciliation process is not at all complicated. This way, not only will you save effort and time by eliminating the need to prepare financial records and reconciling the same during the tax season but save money too against the IRS penalties for making tax errors.

• Maintain Your Cash Flow Statements

Cash flow statements are the soul of financial reporting, and no business can know about its financial performance unless it knows about the amount of money coming in and going out of business. They not only recognize income direction but help focus on the time element for visualizing seasonal expenses/payment cycles. Maintaining cash flow statements is imperative to have accurate financial data in place and make future financial decisions for the company.

• Devise an Efficient Billing Strategy

Every company has some customers who are always late in making payments. These are the customers who affect the positive cash flow of a company to a great extent. This is a huge problem for small business owners as they need immediate funds to carry out their day-to-day operations. This makes it imperative to devise efficient strategies to enable them to make timely payments. If traditional payment collecting strategies do not work, try adopting an innovative approach. For instance, instead of calling them over and over, change the payment terms in a way that persuades them to make timely payments like providing a 2% discount, in case they pay within the first 10 days.  

• Regularly Monitor Your Books

Although it is an important practice, many business owners still take it lightly or avoid it completely. Allocate a specific time every week/month for reviewing and monitoring your books, especially the balance sheet, cash flow/profit and loss statements, even if you have a bookkeeper in place. This makes reviewing bank reconciliations even more important since you can blindly trust your bookkeeper, explains Terence Channon, NewLead LLC’s principal. So, make sure you regularly monitor your books to not only catch financial frauds but to gain valuable financial insights as well.

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• Delegate Accounting Duties Wisely

Financial control is something that no business owner wants to compromise on. This is the reason most of them look forward to delegating accounting duties to their trusted people like family members and close friends. These include roles such as a bookkeeper, Chief Financial Officer, accountant, or controller. However, they do not realize that these roles demand expertise and industry knowledge that only professionals have. So, make sure to appoint the right people since they provide you with the following advantages:

1. Enhancing financial security by mitigating risks through fiscal threat assessments, insurance coverage, diversification, and inventory management
2. Planning Scalability
3. Handling a huge volume of external reports and internal paperwork
4. Payroll Handling
5. Finding cost-cutting opportunities in the taxes, office operations, manufacturing process, employee management, and vendor relationships
6. Streamlining Processes & Maximizing Profits

Avoiding interest charges, fines, lower credit ratings, and penalties resulting from calculating payroll incorrectly, missing deadlines and time-sensitive business opportunities, forgetting to pay bills timely, and more.

• Seek Financial Help as per the Business Size

Just as we discussed above that hiring professionals is of the utmost importance when it comes to getting your accounting operations managed appropriately. However, it is vital to assess the need for financial help as per your business size. If you are a small business owner who has just started out, you obviously do not need a controller or a CFO at this point in time; going with a bookkeeper alone will solve your accounting issues easily at this stage. Although, as a business owner, you can handle initial accounting,but you should hire a bookkeeper for sure in any of or the entire following scenarios:

1. You are entirely dependent on accounting software
2. You aren’t familiar with tax codes and strategies for reducing/avoiding tax
3. You are experiencing rapid business growth
4. Shareholders, lenders, or investors are demanding professionally prepared reports
5. You are spending maximum time on managing books than generating new business
6. You wish to expand to a different line of products, industry, or region
7. You wish to buy, sell/trade assets
8. You have come to know your books will be audited shortly

When it comes to hiring a bookkeeper, it is not at all a complicated process, but if you are looking to save money and time on keeping a tap on his performance, you may consider outsourcing your bookkeeping tasks to a professional accounting firm.

• Create a Central Information Portal

For effective financial reporting, having access to up-to-date, accurate, and complete financial information is imperative, as without that, reports can just be based on assumptions and not facts. So, ensure creating a central information portal where the ‘allowed-professionals’ are able to share the information and use the same to prepare meaningful financial reports for making informed decisions.

• Draft Month-End Financial Tasks, Sign-Offs, and Owners

Have a closing calendar at the end of every month that lists out entire financial and other tasks, sign-offs, and owners. Make sure that the tasks get completed timely, are aligned sequentially, and complement a month-end close that is on-time, in-full, no-error (OTIFNE). An F&A team leader should steer the tracker for maintaining an up-to-date condition on risks and progress and, without delay, make timely financial decisions, explains Geanette Rodriguez-Ojeda, ARRI Rental US.

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• Set-up Effective Policies

Discipline is something that can make or break an organization. If there is no discipline in the way management takes care of its financial tasks or gets it executed through employees, it will never succeed. This makes it vital for businesses to establish effective policies that define benchmarks for work quality and deadlines for both employees and customers. When this type of decorum and discipline gets established and followed, every financial task will be executed efficiently at the employee and customer end.

Conclusion

The above-mentioned tips will surely help businesses in streamlining their accounting and finance processes and become successful. Businesses should realize that they need to work on every financial aspect and allocate the right professionals and resources to it for getting the tasks completed in a timely, accurate, and proficient manner. When major processes like finance and accounting get managed appropriately, it surely increases the chances of a business to succeed since the owners have a lot of time on devising strategies for growth and scalability.

Author Bio:

Tracy Watson works as an Accounting Expert at Accounting To Taxes, a renowned company offering Tax, Financial, and Accounting Outsourcing Services. She is passionate about writing about finance & accounting, small business growth, and entrepreneurship. She is continuously contributing her skills, knowledge, and experience in assisting people with finance and accounting matters.