Your finance team and the financial workflows have to keep pace with business growth and development.
One of the problems we see as businesses grow is a reluctance to let go of the old ways of doing things.
But what worked OK when sales were £500k and the business could be “mentally managed” may not be the best way of doing things now.
The scale is different, the rewards are bigger but so are the risks.
How soon after a month-end can management accounts be produced?
The answer is all to do with being organised and making sure you have the people and software in place to do the work.
All transactions that relate to the month need to be processed correctly during the month and in the two or three days following month-end.
- Sales invoices should all be sent as soon as they can be
- Commissions and bonuses need to be calculated
- Suppliers need to have sent in their invoices
- Stock needs to be counted and work-in-progress estimated
- Reliable accruals for costs incurred but not yet invoiced need to be made
- All bank accounts must be reconciled – to the penny!
The good thing is that businesses get better at all of this as they evolve and reliable management accounts become embedded in the business.
=> Management accounts – are yours fit for purpose?
How do you build a finance team?
Most people don’t recruit finance staff very often so how do you know if you’re getting it right and your in-house team has the skills and experience the business needs?
Some common indicators there are problems include:
- Slow payment of sales invoices
- Cashflow difficulties
- Inaccurate, late or no management accounts
- Losses and surprises
- Suppliers and HMRC not being paid on time
- High levels of stress and late working
Reach out to someone who knows how to run the financial side of a business and take advice so you make the right changes.
=> Plug the gaps in your finance team
How joined-up is your business?
As businesses grow, they require specialisations,teams, departments.
Bureaucracy and costs build up.
But do these departments grow together and have some sense of the wider business and how to work together?
It’s not easy, but get this bit right and you have the foundation for a very successful business indeed.
