A big part of reaching business goals comes down to your accounting function. Is it designed to support your growth plans, or are inefficiencies holding your business back?
The start of a new year is all about setting goals and striving for a better version of ourselves. Businesses are no different—it’s a time to reflect on priorities and focus on achieving key objectives, like revenue growth and operational efficiency.
This is where accounting optimization assessments come in. These evaluations give organizations a clear view of their current operations, helping to identify gaps, streamline processes and align key functions—like accounting—with broader business goals. By taking a closer look at your accounting function, you can position your organization for success and ensure you’re ready to meet the challenges of the year ahead.
Here are some key questions organizations should ask when assessing their accounting function.
Can Your Accounting Function Keep Pace With Business Processes and Goals?
Businesses are often hyper-focused on operations and growth, which makes sense—it’s how a company generates revenue. However, it’s not uncommon for accounting functions to lag behind, failing to mature and evolve at the same pace. This imbalance can lead to an environment where teams are working harder not smarter, and lead to organizations increasing headcount while continuing to rely on outdated, manual processes. This approach often increases inefficiencies and payroll costs rather than addressing the root causes of the problem – which is why organizations should be asking themselves these two questions in the new year:
- Has our revenue grown year-over-year and, if so, how has our accounting function grown or innovated to remain at a maturity level commensurate with the business?
- Have we acquired other businesses and, if so, how have we adjusted our accounting function for proper support?
Do You Have Small Teams Reliant on Tribal Knowledge?
Having employees who have stayed with you for decades is something to be incredibly proud of, as it speaks positively to your organization’s culture. However, long tenures on small teams create the following concerns:
- Segregation of Duties Issues
- Single Points of Failure
- Succession Planning Gaps
Understanding your team’s composition is critical for addressing both short-term and long-term needs. In the short-term, ensuring clear ownership of processes and controls can help mitigate fraud risks associated with segregation of duties issues. Longer-term considerations include succession planning and single points of failure.
A good start to assessing your human capital risk is by answering these two questions:
- Do we have key individuals nearing retirement and what is our succession plan for them?
- Is there one individual in accounting who has the ability and/or responsibility to perform several key tasks? Do these responsibilities increase fraud risk within the organization?
If your answer is yes to either of those, it may be time to develop specific hiring and training needs. This will reduce the risk of single points of failure and allow for proactive succession planning, ensuring a smoother transition when key employees leave or retire.
Is Your Accounting Function Data Rich, But Information Poor?
In many accounting functions, disaggregated or underutilized systems can create significant challenges. Data often resides outside of key systems, in formats like Excel, which can lead to inefficiencies and errors. When speaking with clients, we usually lead with two simple questions to understand their existing tech stack:
- Are your processes manual and paper-based or technology-enabled?
- If technology-enabled, does the technology meet your needs, and if not, is this a user problem or technology shortfall?
By embracing the right technologies, businesses can improve visibility, streamline processes, enhance data accuracy and enable true reporting and insights to make key business decisions that drive growth.
Accounting optimization assessments are a powerful tool that helps organizations discover who they are compared to who they want to be from an operational perspective. When utilized correctly, they help map a better path forward toward organizational improvement, sustainable growth and achievable financial goals.
If you are interested in learning more about how an accounting optimization assessment can help your organization achieve its growth goals, please visit our dedicated Accounting Optimization Assessments page or contact me at [email protected].
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Our team of experienced risk advisory professionals focus on collaborating with your organization to identify and effectively mitigate risks. Our goal is to understand not only the risks related to potential loss to the organization, but to drive solutions that add value to your organization and advise on opportunities to ensure minimal disruption to your business.
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