The operational efficiency of your business is largely defined by how well you utilize and allocate your funds. Finance management is the lifeblood of any business. Not only because finances are hard to manage, but also because they help you to undertake crucial managerial decisions.
No amount of product innovation, marketing, and sales leads will be of any good if they’re not generating funds at the end of the day. Financial management is also important because it creates value for your firm. When you have a good idea of where your company stands in terms of profitability, you can decide on a future course of action in an effective way.
The question is, however, who manages finances in a company? Is it the CEO, the board of governors, or the managers? None of them, actually; it’s a common misconception that the job of a finance department is confined to generating the payroll and printing paychecks. In reality, the finance department pulls the strings when it comes to effective money management.
In this post, we’ll talk about some of the ways you can improve the accounting and finance efficiency in your business:
1. Train your staff
Training and development are the key ingredients of building a successful organization, but in the case of the finance team, they’re even more central. This is because your financial processes need to not only comply with the regulations of the Internal Revenue Service, but should also be carried out in accordance with changing economic policies.
The accounting workforce should, therefore, be well-informed about the latest changes in both policy frameworks and technological advancements. If there is new accounting software that you think the finance and accounting departments can benefit from, they need to be educated and trained to use it.
In addition, if one of the accountants falls sick or takes a few days off for a holiday, the rest of the team will be able to carry out the work if they’re trained well. This will make sure that financial tasks are unaffected by contingencies.
Different types of training include guest speaker sessions by industry veterans, conferences, and seminars. You can also provide one-on-one training sessions for individual employees who need to do better in a certain area, for example, tax accounting.
2. Improved coordination between departments
The accounting data generated by the finance department isn’t just useful for them. Let’s look at it this way: the finance department is in charge of generating, printing, and sending out invoices. But your customer relationship department should also be updated on the number of invoices that are pending so they can engage with customers accordingly.
The supply chain department constantly needs to be updated regarding budget constraints so they can cater to logistical issues accordingly.
And that’s just the tip of the iceberg. Even your accounting department needs information generated by other key players in an organization. If the accountant doesn’t know the exact number of days taken off by a certain employee, they can’t generate the payroll accordingly.
All of these issues can be addressed through cross-departmental information sharing. Instead of sending memos and manually requesting for information every now and then, companies can set up a cloud-based ERP system.
This will prevent the departments from working as silos. Through the ERP system, finance information can be extracted from other departments in a matter of seconds. Not only will this save time, but it will also encourage enhanced coordination.
3. Use batch payment processing
For e-commerce businesses and SMEs, invoices play a vital role compared to other components. Most accounting teams lag behind in terms of work targets because they process one invoice at a time. This is very time-consuming.
On the other hand, it’s always more convenient to consolidate invoices. To do this, you can ask the designated staff to submit their invoices at a preset time so the accountant can process them all at once. Set a fixed date for this and all the claims and reimbursements can be sorted out along with the invoices.
4. QuickBooks hosting is the way to go
One of the biggest reasons why finance departments become inefficient is the use of manual accounting systems. Accounting software like QuickBooks should have replaced your manual accounting systems ages ago! QuickBooks is capable of simplifying even the most complex of accounting functions, like tax filing, capital budgeting, and financial forecasting.
One of the key benefits of QuickBooks hosting is its accuracy. Human calculations are far more susceptible to errors compared to those carried out by the software.
Other than that, the software caters to a wide range of accounting functions which would have taken too long otherwise. These include tax accounting, payroll service, expense tracking, bookkeeping of everyday transactions, and compiling important financial statements like year-end income statements.
The bonus is that QuickBooks is easy to use to the extent that you can cater to most tasks on your own. There will no need to hire a full fledged accounting team. We hope these tips helped you improve finance and accounting efficiency!
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