RUNNING AN EFFECTIVE ACCOUNTING AND FINANCE FUNCTION
Accounting and Finance is a vital function in any organization as it has the potential to improve profitability and cash flows. Accounting is a backward-looking function responsible for recording and reporting the cash flow transactions of an organization, while finance is a forward-looking function that advises on the use and mobilization of financial resources to meet the organization’s growth objectives and to maximize shareholder return. Reports generated by the accounting and finance function are therefore critical in assisting executives in strategic decision-making.
It is therefore prudent for businesses to find ways to improve the accounting and finance function’s efficiency, productivity, and effectiveness. Below are some tips to help your business achieve this.
Reconciliation of your accounts payable, accounts receivable, and bank statements is much easier if done on a monthly basis. This reduces the chances for mistakes and errors as there is enough time to identify and resolve incorrect transactions.
Have in Place Rigid Deadlines
Have in place a system and guidelines for submitting invoices, requests, budgets, and other documentation so that the accounting and finance team is better able to meet their own deadlines.
Establish Internal Controls
Internal controls, policies, and procedures will reduce the risk of fraud. It is important to have separation of duties for processes that involve making or receiving payments.
Processes should be reviewed at least annually to determine if they are still ideal for the department’s vision, and if they are working well from the perspective of other departments. This will reveal weak points in the accounting and finance function.
Use of accounting and bookkeeping software will save your organization time and money. This software will automate routine processes and introduce electronic forms of document management. In addition, it is good to have a back-up for accounting software data either in form of physical copies or stored in a hard drive.
Training & Development
Identify the skills and talents of the team, assign them projects in their areas of strength, and provide training and development in their areas of weakness.
Accounting best practices and tax laws are constantly changing and improving. It is therefore important to continually read, research, and attend events that highlight industry changes and best practice.
Outsource jobs or tasks that are not a core function of the business and that can be accomplished at the same quality for a lower cost.
- Dan (2017). Productivity of an Accounting Department. https://strategiccfo.com/articles/profitability/productivity-of-an-accounting-department/
- Callum Hughson (2019). The Language of Business: Finance and Accounting. https://www.ivey.uwo.ca/academy/blog/2019/04/the-language-of-business-finance-and-accounting/
- DocuPhase (2022). 10 Tips to Improve Your Accounting Department. https://www.docuphase.com/blog/10-tips-to-improve-your-accounting-department
- DocuPhase (2019). Best Practices the Most Effective Accounting Departments Are Already Following. https://www.docuphase.com/blog/best-practices-effective-accounting-departments
- GrowthLab (2021). 6 Steps to Improve Your Accounting Practices. https://www.growthlabsolutions.com/post/6-steps-to-improve-your-accounting-practices
- Anam Rehman (2020). Effective Bookkeeping For Business Growth. https://chacc.co.uk/general-blog/improve-bookkeeping/