Why is it important for finance and accounting functions to be handled by accounting professionals?
Accurate and current books are imperative to operational efficiency. If your business isn’t booking sales and payments on a regular basis then you will not know the current financial position of your company. If you are not paying bills on time then you are not only paying late fees but are unable to take advantage of early pay discounts offered by some vendors. This also prevents companies from producing financial statements or short and long-term projections.
Posting and reviewing accounts routinely enables you to ensure that all clients have been billed and that all bills have been paid. This will also isolate what clients have not paid for services and allow you to collect on these amounts in a timely manner. Effective billing and bill-paying builds credibility for your business.
Cash management is the key element to the planning and efficient functioning of all business operations. Without good cash flow management, a business may be profitable on its financial statements yet unable to meet financial obligations.
Having routine financial statements helps you plan and improve before it’s too late. You need a current snapshot of your company’s financial situation always at your fingertips. This allows you time to implement changes that will increase profitability in the coming weeks, months and years. These statements also allow you to see if expenses and revenue are over or under budget and can allow you to reforecast quickly and effectively. Financial statements are also needed to improve your access to outside sources of funding. If you would like to approach the bank or an investor for a loan, credit card, or a line of credit you will have to provide current financial statements.
How are your bank accounts set up? Do you have proper services for the functionality of the accounts? Are you paying more fees than you should be? This is all part of proper treasury management. If banking isn’t set up properly you can subject yourself to fees for services you don’t really need. Improper set up can lead to fraud from inside or outside of the organization.
If your business isn’t handling each and every aspect of the finance and accounting functions listed above, then you need to consider hiring a professional accountant to handle them for you. Outsourcing of accounting and bookkeeping services has become more prevalent in recent years. The use of accounting in the Cloud and other Internet sources, such as Google docs, has made it easier to outsource these functions with confidence in their security. The value added will give you back time and resources to focus on your core business.
If you have questions on any of these processes, please don’t hesitate to contact me.
Copyright 2014 Christi Rains, Alpha Omega Consulting & Bookkeeping, LLC www.aobookkeeping.com