Whether it’s an entire department or a lone CFO, your accounting team is the backbone of your organization. Chances are, though, that a handful of tasks take up way too much of their time and energy. The resulting frustration, exhaustion and long hours can have serious repercussions for your company, including errors and burnout.
Here are the top five biggest headaches for your accounting team — along with ways to fix them.
1. Month-end close
Accountants need to close out all financial activity for the preceding month by collecting, analyzing, recording and reconciling all transactions for that period to produce accurate balance sheets, income statements, cash flow statements and more.
It’s essential, but time-consuming. Data must be pulled from various systems and integrated, often manually. Poor coordination and a lack of standardization across departments can cause delays and errors just when speed and accuracy are needed most.
Take heart, though: with timely reconciliations, monthly closes can be done in a reasonable amount of time. Integrating your systems, automating your workflow and having clear documentation for the entire process will take your month-end close from chaotic to calm.
2. Balance sheet reconciliation
One of the key components of the month-end close is balance sheet reconciliation, a comparison of two sets of records to check that the amount of money spent matches the amount shown leaving an account. As part of the month-end close, balance sheet reconciliation must be done by the last day of the month. Unfortunately, collecting the necessary data can be time-consuming and frustrating.
Here again, automation can streamline this process. Set up correctly, technology can help your team reconcile on a current basis (we recommend weekly), rather than having to wait for the end of the month and doing it all at once.
3. Budget variance analysis
Budget variance analysis compares what was budgeted with the transactions that actually took place. Variance analysis can be powerful in helping companies to course-correct by finding ways to cut expenses or increase income, adjust future budgets and determine where additional financing is needed. When discrepancies pop up, finding the causes can take considerable time, making it a time- and labor-intensive process.
Fortunately, budget variance analysis can be made easier with the right applications and staff trained to use them. These ensure your actuals are always up to date and that you are building budgets based on real-time sales, marketing and operational data.
4. Forecasting and projecting
Financial forecasts and projections use previous sales data, revenue patterns and some external data to estimate future performance. Your accounting team gathers, organizes and analyzes this data to help your company build logical financial assumptions and make strategic decisions.
Unfortunately, many accounting teams are limited in their ability to make forecasts and projections because they are too busy, don’t have the proper level of staff or are limited by a lack of efficiently collected data. Finding the right application, building it out, training staff to use it, and training them on forecasting and projecting can pay dividends in terms of saving time and helping teams make accurate predictions.
5. Excel spreadsheets
Many businesses still run their accounts on Excel. While it’s easy to learn, Excel doesn’t offer any integration capability, meaning that records of transactions, often from a range of different systems, must be manually entered. This is time-consuming, opens up the possibility for errors and makes it difficult to scale your accounting system as your business grows.
Both speed and accuracy can be improved by automating information entry. Upgrading to an integrated system that captures all the information at the front end will create more accurate records in far less time.
How BPM can help
Whether your accounting team is understaffed, doesn’t have time to automate its systems or is simply too small to handle all of your company’s growing needs, BPM can help. We offer outsourced accounting services and day-to-day financial management solutions tailored to your situation. Let us handle your accounting so you can focus on growing your business.
Contact us to discuss your accounting service needs and visit our interactive guide to discover additional ways to leverage outsourced and managed services from BPM that will help your business realize its future vision.