Staffing Accounting – Finance Department For Start – Ups to Medium-Sized Companies

I have had a lot of conversations recently about staffing the accounting and finance function in the company. As companies grow and shrink, their needs in this area change. We certainly do not want to be over-staffed, and we also want the most cost-effective staff doing as much of the work as possible. For example, we typically do not want our Controller or CFO entering payables – this task can easily be delegated to a much lower cost employee.

In a a simplified organization chart of the different accounting and finance functions, a CFO would be at the top of the chart with a Controller reporting to her. The Controller would have staff in AR, AP, and Payroll along with one or more accounting managers over one or more of those functions. The reality is that most start-up and emerging companies cannot afford all of these positions. My purpose in this post is to explain how to fulfill all of these necessary functions throughout the life-cycle of a start-up company. I am making the assumption that we all understand the purpose of the accounting/finance function as well as the assumption that the company has or will hire the appropriate outside professional(s), like a tax CPA, to help the company remain compliant.

Even at the earliest stages of a start-up, it is usually best to hire a part-time bookkeeper to fulfill all of the roles listed above. They usually do not have the expertise of a high-level controller of CFO, and they will be slightly over-paid for doing some of the more clerical tasks. But the bookkeeper gives an affordable and flexible option to start-ups.

As the company grows and has revenue, the company should begin to look to hire full-time clerical staff to handle most of the AR, AP, and payroll tasks while the bookkeeper remains part-time and delegates everything they possibly can to the in-house staff. One of the major challenges that usually emerges during this process is that the part-time bookkeeper will begin to struggle to keep up, especially with the monthly financial statement preparation and analysis as well as other management reports on how the business is doing and what improvements should be made to maximize cash flow.

Often the next best step is for the company to consider engaging the services of a part-time CFO. This individual will be a strategic direction to this department and may only be needed about a half-of-a-day per month. As the company continues to grow, the part-time bookkeeper will need to be replaced by a full-time Controller or Accounting Manager. All of the full-time accounting staff will report to this person. In addition, this position will take direction from the CFO.

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Is Your Finance Department Fighting Fit? You May Need an Accounts Reconciliation Healthcheck

As a finance director you may not be fully aware, but your finance department could also be a part of the overwhelming majority that are concealing an illness. The question you need to raise is your account reconciliation process fighting fit? A reconciliation medical exam will dramatically improve your finance department’s processes and will deliver additional worth and help facilitate to drive down costs. In line with a recent finance survey, only 8% of financial accounting employees are actually happy with their monthly close process. This implies that a large 92% of finance workers assume that it is time to call in the doctor as their financial close procedure is sick. The simplest way to help establish all of the potential issues within finance department is to carry out a reconciliation medical exam.

There are 3 main advantages of an efficient account reconciliation strategy that need to be considered: reduced operational costs, mitigated risk, and the tightest attainable compliance. Each account reconciliation method ought to give clear visibility over key financial information to bring these advantages – nevertheless however in line with a recent financial survey; only 8% of senior finance employees are happy with the visibility of key financial information.

Stages of the reconciliation lifecycle

There are four major stages to a reconciliation lifecycle:

1. Data import and enrichment.

2. Matching.

3. Exception management.

4. Reconciliation.

In order to produce the complete advantages of the account reconciliation process every stage should be in good health: optimised to be sturdy nevertheless agile, and standardised across your entire business. However, with 46% of finance employees using a shared spreadsheet solution to achieve a summary of all their data, their ledgers, to achieve the level of standardised reconciliation required for a really great reconciliation process may be a tall order indeed.

Checking the health of each stage

A health check of every stage of your reconciliation lifecycle should not be a large challenge. You need to possess an honest appraisal of where your department presently sits and wherever you wish to be.

1. Import and enrichment – This initiative is crucial in standardising your data. Enriching your knowledge upon import is much more efficient than doing it ad-hoc, reducing the price of your reconciliation process and limiting the chance of errors later on.

Health risks: the data import and enrichment method could also be let down by the usage of spreadsheets – thus if you’re still using them as an accounting cure, stop! They provide unsecure following or segregation of duties, no automation of enrichment and they do not preserve the initial details of the account. Not to mention the potential problems that arise from sharing spreadsheets- Sharing a finance spreadsheet is extraordinarily risky especially when it involves the health of your reconciliation. It is not always possible to inform you who has used the spreadsheet, have their changes documented and spot any errors that are created. Despite this risk, over half of all finance departments still share finance spreadsheets to organise their reconciliation.

Prescription: Specialist accounting software packages are much quicker, more accurate and helps guarantee compliance – paying for itself in the reduction of cost to your department.

2. Matching – Matching financial data is the core of your reconciliation process and also the one that consumes the most amount of time. While comparatively easy, the task is horrendously mundane for any accounting employees.

Health risks: Its very nature implies that manual data matching will prove to be the most error prone stage of the reconciliation method. Providing that a quarter of finance employees have no second authority or approver, this might mean that mistakes aren’t detected before filing.

Prescription: automated transaction and data matching software solutions cuts out around 98% of the manual work, serving to minimise errors. An enhanced automation software solution can even progress the reconciliation lifecycle forward for you and make sure that there is continually a second authority before figures may be signed-off.

3. Exception management – to create the most effective use of your time you want to be able to prioritize the unmatched exceptions in your ledgers.

Health risks: whereas exception management ought to cut back operational costs, sloppy budgets, input errors and also the increased activity for the managerial team will mean that costs grow much higher. This might be somewhat relieved by a less centralised method, permitting employees to tackle exceptions at source rather than add an additional method in later.

Prescription: automated account reconciliation software may be tailored to manage exceptions, which can help by dramatically reducing time, cost and error rate.

4. Reconciliation – The part where you get to play detective. Why don’t these amounts match: It might or might not be an error, underpayment or even perhaps fraud? Reconciling mismatched figures provides finance employees plenty additional information to get their teeth into; however the method remains vulnerable to health issues.

Health risks: one of the largest reconciliation health risks is that the overreliance on paper for archiving. When reconciling items, it’s typically necessary to trace back through all of the previous monthly close reports, as well as ledger entries and bank statements. However, 64% of finance employees still at least, in some way rely, on binders and paper to archive their financial close results.

Prescription: as well as being far more secure, digital archives can also be much easier to look through than paper archived financial data for the required information. Digitised financial archives create the reconciliation process faster, easier additionally as helping you keep compliant with things like eDiscovery requests.

Overall, the reconciliation lifecycle is an important method for the finance department, however for many people there is still an abundance of enhancements that are required to be carried out. The health risks exposed to your finance department’s reporting, issues with governance, risk and compliance and threats to your future financial position are all over the place. It is necessary for Finance directors and CFOs to make sure that their reconciliation process is in great health. A healthy finance reconciliation helps maintain correct and up-to-date general ledger data by comparing it to details noted within the subsidiary ledger for every account.

Poor reconciliation will result in cancerous late payment penalties, unnoticed liabilities, and missed vendor discounts. For these reasons each finance department ought to perform a daily self-examination, or internal audit frequently.

However, if you are seeking for the magic pill which will alleviate all of your woes then you ought to take a look at an enhanced balance sheet reconciliation software package. This type of accounting and reporting software package automates giant chunks of the reconciliation lifecycle, delivering multiple prescriptions quickly.

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Why Finance Recruiters Are an Important Part of Your Hiring Strategy

When you need to fill positions within the finance department, it is important that you create a hiring strategy. Finance recruiters will be able to help you fulfill the strategy entirely so that you can focus on other areas of the business. If you are responsible for all aspects of hiring, you will find that the process is going to take considerably longer – and this may not be something that you can afford.

Your hiring strategy needs to consist of such things as:

a sufficient job description
a large pool of candidates to choose from
a list of desirable skills
knowledge of the industry
various ways of listing the job opening
a timeline

Executing the hiring strategy is going to take knowledge of the hiring process, as well as multiple people to help you. You cannot be responsible for creating the job description, creating job opening listings around the area, compiling all of the resumes, and conducting interviews. It simply cannot be done because you have other responsibilities within your organization.

Finance recruiters will be able to streamline the process because it is their business. They are responsible for recruiting finance individuals all the time and therefore they already have a lot of the work done for you. They have a timeline that can be customized for you, they have job descriptions that can be tweaked for your organization, and they most likely have a large pool of candidates that they can already begin pulling from.

By working with professional finance recruiters, you can make short work of hiring a qualified individual for your organization. Regardless of the actual job position that you need to hire for, a recruiter will be able to find you someone quickly so that you can get them started right away.

The longer you leave a job position open, the more strenuous it is going to be for the others within the department. For example, if you need someone in the Accounts Receivable department, everyone else is going to work longer hours and have more on their desks because you are short one person. If you begin to stress all of your employees out for too long, you may be looking for more than just one person because others will get tired of picking up the slack and leave the organization as well.

Finance recruiters will simplify the process, expedite the hiring process, and find you qualified candidates. They are familiar with the skills needed within the finance industry and can tell the difference between someone who has skills and someone who has a polished resume. This will work to your advantage. So that you can feel confident in the person that you ultimately offer the job position two.

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Drive Growth Through Innovation in Your Finance Department

Cognitive surplus has been recently proven to be a gold mine for a collection of different departments. Don’t you think it’s about time you learnt to benefit from this within your finance department as well?

Go beyond the apparent and obvious
All of the typical financial processes that most companies will utilise to drive growth are fairly obvious these include: cutting into the bottom line, maximizing revenues at the top line, and calculating the return on investment (ROI) for any new investment opportunities.

But if you can make ‘innovation time’, in conjunction with financial analysis, you will find that you are given a chance to look at less traditional levers to drive growth within your department.

Not a very exciting task
Ensuring that you are given real time away from the stress of daily tasks will eventually prove to be an invaluable exercise. Real time allows you and your department time to reflect and allow you analyse the performance of your finance department within the past versus the demands, your deliveries and performance of today. By reaching into and exploring your cognitive surplus, you and your colleagues could discover areas that are limiting, and which could limit your financial performance tomorrow. By taken a look at these limits you and your department can explore alternative solutions to help drive growth and increase the overall innovation of your company.

With your financial performance analysis in situ and a collection of innovative ideas in hand you’ll be able to better forecast and set up departmental budgets, whilst providing a firm foundation from which you are able to review any innovative concepts to vary the business structure serving to help alter the performance/cost ratio in a positive direction.

Want a push towards the right direction
Want a sensible push towards the right direction, which will help you greatly improve the performance of your finance department?

You probably have an identical gut feeling that was brought to our consciousness by an accounting survey of the financial close process: only 28 % finance employees trust the reported numbers within the month end financial close making historical account analysis an even more arduous task.

Financial Reconciliation software can make the whole financial close process quicker and more economical by the complete integration of automatic account reconciliation with automated approval workflows. With the utilization of summary dashboards, account reconciliation software makes strict compliance the quality standard for your team, whilst at the same time executives are often accurately kept within the loop with drill-down reports at the press of a button.

You can conjointly do away with binders and build your historical analysis faster and easier with a completely digital archive. Although storing all monthly close reports in binders may provide that old-fashioned feel of security, however that feeling can be misleading. Using binders to archive can in the long run prove more of a hindrance than a help. Problems that can arise are:
Which binder is all the information archived in? This issue can further be compounded with the problem of physical space required to store all of your company binders.

Where in the binder is it? Generally binders over time become too hefty to go through. So whether you’re working with binders or spreadsheets maintaining that control and overview are a top priority. At any moment, you need to have all documentation in place and to understand the status of every person and every task. Financial Reconciliation software can help you to streamline and digitize your monthly financial close process. Whilst allowing you to replace cumbersome spreadsheets and full binders with an up-to-date real-time overview of the entire balance sheet reconciliation process.

Taking all of the above into account what’s more, due to all of these efficiencies financial reconciliation software will actually help you facilitate to make ‘innovation time’ within the financial department, serving to create a virtuous cycle of enhancements and innovations with in your department.

With all of these helpful features and more it isn’t hard to ascertain how using financial reconciliation software will greatly utilise your cognitive surplus and help streamline your finance department helping your business grow.

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