With the new fiscal year ahead, many businesses are reviewing the ways in which their accounting and finance processes, practices, and workflows can be improved for 2023. According to a study conducted by McKinsey & Company, the average company grows just 2.8% each year and we know slow growth patterns are closely correlated with complacency and inefficiency. Streamlining back office operations can free up valuable time to focus on growth related activities, but many companies are reluctant to review their processes as they lack the knowledge or expertise.
For companies that aim to continually evolve, it is necessary to spend time considering the financial strategies and processes that have previously been effective, as well as the ones that have not. Performing this analysis can help to align a team on what is working, what is not, and what is the ideal state.
To help support a successful 2023, we’ve compiled a few back office priorities for management to review going into the new year.
Refine (or Redefine) Company Strategy
Before reviewing accounting and finance systems and processes, it’s important to refine the company strategy. Whether this year is about growth, execution, profitability or something else, it’s important to get everyone aligned and working towards the same goals.
Companies that have lost sight of their focus struggle to understand their ideal customers, implement effective strategies, and set appropriate goals. To refine their company’s focus, entrepreneurs should revisit the core questions of why they started their business, and what they had hoped to achieve with their products or services. With these reflections, and a renewed appreciation for what lies at the heart of their company, entrepreneurs should review how each aspect of the business aligns with that goal. It’s not until this step is completed that companies can begin to review their systems.
Build Strategic Partnerships
Once the strategy is finalized, it’s important to understand who the key players are to help you achieve your goals. No matter how outstanding a business is, it is unlikely that it has all the expertise internally to excel in every single area of operation. This is especially true for recently-established businesses with smaller departments and fewer staff.
By attempting to take on too much or put too much on each team member, it becomes all too easy for a company to lose its focus and spend unnecessary resources to perform all of its necessary functions internally—even if they are performed inadequately. It may seem like doing everything in house is the most cost effective way to get things done, but it may well be the opposite.
Building advantageous partnerships with professionals is an excellent way to ensure that a company is able to function optimally, with staff members doing what they do best. This might mean outsourcing certain functions to partners who have extensive experience and knowledge in their field.
We recommend starting with outsourcing accounting processes as it allows management to focus on the aspects of the business that result in additional revenue and profit. By outsourcing, entrepreneurs will also enjoy the full accounting department experience without the internal hiring hassle and expense..
Streamline for Increased Efficiency
Streamlining internal processes can lead to quicker sales closes and less operational overhead. It’s important to start by understanding where every team member’s time is best spent. Everyone has their core competencies so it’s best to allow each member to focus on the aspects of the business they are best at in order to build the most efficient and effective company. By streamlining operations, you will allow for a more fulfilling work environment and build a team structure that is scalable into the future.
In few areas is streamlining more beneficial than in accounting processes, which can consume a significant amount of a business’s time and attention each day. By keeping accurate, up-to-date financial records, leaders are able to set realistic goals, develop appropriate financial strategies, and make business investments with funds that they unquestionably have.
Contact us to take the first step toward streamlining your business’s accounting for 2023.
