While the products and services of each company may be unique, the general accounting process is basically the same. There are bills to pay, money to deposit, revenue to recognize and profit to calculate. At the end of the month, accounts are reconciled and financial statements are prepared. However, there are a few characteristics that highly efficient finance departments have in common.
The accounting cycle is repetitive and predictable, making it possible to create a schedule that everyone can adhere to. Effective teams meet their deadlines and provide management with financial statements within a specified number of days into the new month, every time. If this deadline is consistently met, owners and executives will gain confidence in the department.
As with the human brain, most people utilize only a fraction of their enterprise software’s capabilities. Well-run departments will always be on the lookout for opportunities to automate manual processes, thus minimizing errors and maximizing efficiency. They also participate in the software user group meetings and stay current on the latest software features. By communicating with their counterparts in other companies, staff can learn new processing and troubleshooting methods.
Whenever possible, batch processing is a great way to save time and improve efficiency. Process checks once a week on a specified day rather than every time one is requested, and attempt to minimize exceptions. Eventually, vendors and employees will become accustomed to the schedule. Take the same approach with vendor invoices. Enter expenses in batches rather than each time one arrives in the in-box.
Sometimes processes become obsolete, particularly manual ones, and are repeated only because of habit. It is essential to periodically review department policies and procedures to ensure they are still relevant and the most efficient way to get the job done. This will help maintain the best utilization of resources and help the team remain on the cutting edge.
Accounting processes are repetitive, cyclical, and often handed down from one employee to another through attrition. A periodic review will help determine whether tasks are being efficiently managed and are still relevant. Adhering to a monthly calendar that specifies when clients are billed, expense entry is completed and financial statements are distributed will present the finance team in the best possible light. A well-run finance team will also make sure it is getting the most out of its software tools to maximize efficiency and minimize manual processing. Management may never realize many of these things are taking place, but they will definitely appreciate the end result.