Angela Alvig, CPA

Working Through Transitions in your Finance/Accounting Department

Published May 20205 minute readInsights from Heidi Rechtzigel Schmitz

Transitioning your small business accounting department can be a daunting task. External forces, such as an economic downturn, or internal changes such as loss of key accounting staff may require you to transform the accounting function. Or perhaps the business owner has been acting as the company accountant and due to business growth, needs to delegate this task.

Determine What You Want From Your Accounting Department

The information provided by your accounting department is intertwined with every facet of your business. Thus, careful thought should be given to any transition, as you find an efficient way to run the department. Determine what you want, consider what you have, then develop a plan for an effective transition. Your accounting department is likely a small headcount within your business, but the information produced and analyzed could lead to significant success and growth.

Determine What Financial Information Would Be Valuable

Discuss with your executive team and managers to find out what financial information they would find valuable. Outside of budgeting reports, perhaps there is more analysis they would like to see. Inquire if costs are being allocated appropriately. Just because certain reporting has been done in the past, does not mean it needs to continue going forward. Often reports are generated out of past habits, creating a waste of resources. Instead, make sure any reports are helping create strategic discussions for the future. 

Review Accounting Staff's Current Responsibilities

Talk with your accounting staff and review their current duties and responsibilities, noting the time commitment for the various tasks. Consider all responsibilities, from daily transaction entry to payroll to financial analysis. Carefully consider whether the processes in place makes sense, or if there are redundancies. Find out what has been automated and consider what could be further automated to improve efficiencies.

Evaluate the Level of Difficulty of the Accounting Tasks

Consider basic accounting tasks that must be performed, and the higher-level financial analysis that is imperative for company growth. Then consider these needs and compare them against the experience and capabilities of your current staff. Technology has led to improved accounting software, which can provide real-time analysis and eliminate manual accounting laborMake sure you are utilizing staff to their highest potential rather than bogging them down with tasks that a less experienced person could perform. This will free up higher-level staff to add more value.

Create A Proactive Plan

Successful transitions require a proactive plan, while maintaining ongoing accounting processes and financial reporting for the business. The plan should also include an internal control review and documentation process. Documenting the internal controls to establish operating procedures will prevent disruptions in the future. Assign the transition plan to a main point person and have them detail the project steps required, including a timeline and tasks for each step. Make sure to maintain constant communication and monitor progress towards the goal.

Review External Options

Considering looking externally for someone to do the assessment, provide strategic options, develop the plan, and lead the change. Internal staff may be reluctant to drive change out of fear for their job; that’s human nature. An outside consultant will more easily discover redundancies in your current process and can suggest proper improvements.

Simplify Wealth has significant experience in assessing and improving accounting processes for business owners. If you are frustrated with your current accounting processes and want to improve them, but don’t know where to start, we can help!