Managing accounting for a business of any size presents its fair share of stresses and challenges. Having worked with many companies on the implementation of accounting and Enterprise Resource Management (ERP) software, we’ve observed these difficulties in real time. Here are the five top accounting challenges we see:
- Streamlining accounting processes to improve productivity—Accounting and financial management is itself an operational part of the business. The more productive people can be in the accounting department, the more the department will contribute to earnings. (Or, at the very least, it will reduce Sales General and Administration (SG&A) expenses, which C-level managers tend to like.) To make this happen, it’s necessary to streamline accounting processes. Even simple workflow steps like opening and reading an email take time. Whatever you can do to make things move more quickly—without causing errors—will help improve productivity.
- Achieving real-time visibility throughout the organization—Accountants hate surprises, so it’s advantageous to get more visibility into what’s happening in the business. Visibility might include factors like the rate of sales growth, the acceptance of large orders that might require vendor credit to fulfil, and so forth.
- Consolidating financials efficiently—Many companies today comprise multiple corporate entities. Separate entities for operations and distribution, as well as foreign subsidiaries, are common examples of this practice. For tax and business management purposes, however, it’s usually necessary to create consolidated financial statements. Without the right software this can be a slow, burdensome task.
- Staying on top of cash flow and accounts receivable/collections—Cash is King, as they say (or Queen, because it’s 2020). Every business needs to stay on top of its cash flow, which means paying close attention to accounts receivable and collections. As suggested in #1, however, it’s all about doing this work efficiently. The challenge is to be confident you know the company’s cash position and cash flow forecast at any time—without having to expend too much labor to achieve this goal.
- Closing the books for each accounting period—Closing the books can be a challenge when there are unfinished transactions to journal and subjective issues to resolve such as writing off of bad debt and so forth. The more manual tasks that are required to close the books, the longer it will take.
Modern accounting software like Sage Intacct or Microsoft Dynamics helps you overcome these challenges. They offer workflow automation that streamlines processes. They feature data analytics, reporting, alerting and data visualization to provide visibility into the overall business. They enable efficient consolidation of financial statements, automated cash flow reporting and streamlined processes for closing the books.
At a higher level, accounting packages like these go beyond accounting and financial management. They connect with operational ERP systems that handle manufacturing management, Human Resources, distribution, field service, logistics and more. Working together, modern accounting and ERP solutions enable better, more operationally aware accounting.
To learn how modern accounting software can help your accounting department run better, let’s talk.