An inability to scale key business functions can keep businesses from growing. This is especially true of the department through which all money goes in and out—accounting. Yet there is a misconception that scaling accounting means adding headcount and workload. On the contrary, here are some ways to scale small business accounting efficiently in preparation for future growth.
Look for ways to eliminate data entry
Among the dated inefficiencies bogging accounting departments down, manual data entry has to be one of the primary culprits. Are your accountants spending time updating Excel spreadsheets, manually inputting customer data or cash receipts? Finding a way to automate data entry can free up time and resources for more productive activities.
Identify and track key metrics
What are the metrics and key performance indicators (KPIs) that provide the most useful insights into the efficiency of your accounting department? The answer will not always be the same from business to business. Yet, drilling down and identifying the most useful metrics, such as accounts payable turnover, receivables turnover, and employee work center loading can help set benchmarks to measure against when things do begin to ramp up.
What is are the key touchpoints throughout the entire customer cycle between your clients, customers, vendors and the accounting team? Which stakeholders and processes are involved? How many man hours are devoted to tax preparation, for instance. What about accounts receivable? You might see trends and customer behaviors that clue you in to potential efficiency gains. Mapping out this journey can help you identify pain points and bottlenecks that tend to get worse as a business expands.
Automate, automate, automate
As you audit current processes and identify potential efficiency gains, think too of high-cost, time-intensive processes that could be automated. Aside from the lower cost of accounting automation software compared to traditional desktop technology, accounting automation software can create savings in new areas, especially for processes that are frequently repeated or that require heavy manual input.
Train your team on day-to-day processes
How well is your team trained on how to make the best use of the tools you already have in place? Professional development classes are one thing, but training your team on how to perform day to day accounting activities using your automation software, for example, or other tools, can be just as important. The more capable they are of leveraging the accounting tools at hand, the better suited that team will be to handle the increased demand that comes as companies scale.
Scalable teams work smart
Again, scaling accounting doesn’t necessarily mean getting busier. It doesn’t mean dumping more workload on an already overtaxed accounting team. Identifying and realizing efficiency gains can help your team work smarter with the same or more workload. And working smart makes it possible to scale a small business accounting team to keep up with the pace of company growth.