Shagun is an ex-Fortune 100 auditor, process consultant and CEO of SkyStem who designed ART, a month-end close solution for accountants.
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Efficient accounting teams work at the top of their game, providing accurate and timely financial data and enabling management to make informed and tactical decisions. For instance, a company with a well-managed accounting department can quickly assess the financial implications of market trends and adjust its strategies accordingly while limiting rework, time waste and manual work.
Added to that, a proficient accounting team ensures that the company meets all relevant deadlines and complies with all regulatory requirements, avoiding legal issues and financial penalties. It keeps abreast of changes and gains knowledge on how to implement them.
Here are some tips that businesses can take to have agile and technology-savvy accounting teams in 2024.
1. Do accounting in the cloud.
Traditional accounting methods often involve maintaining physical records, using on-premises software and relying on manual data entry. Cloud accounting, on the other hand, helps companies utilize online applications and services hosted on remote servers. These systems can offer substantial benefits to companies by providing real-time updates to the software, where the company can enjoy updates and new features immediately.
Additionally, cloud accounting platforms are often scalable, meaning they can accommodate the changing needs of a business. Whether a company is a small startup or a large enterprise, these systems can typically scale up or down to meet demand.
2. Use data for meaningful insights.
Accounting is no longer just about balancing books; it's about extracting meaningful insights from financial data. Therefore, in 2024, companies need to invest in tools that can enable their teams to leverage data analytics, uncover financial trends and identify potential risks. As a result, accountants can contribute to the overall success of the company.
For example, the accounting team can develop accurate sales predictions and spending budgets based on market trends and historical data. This not only helps in planning inventory levels but also enables the company to optimize procurement and production processes.
3. Be timely in your reconciliations.
Timely reconciliations play a crucial role in maintaining the accuracy and reliability of financial records, which allows companies to detect irregularities or discrepancies that may indicate fraudulent activities.
To ensure timely reconciliations, enterprises need to set a regular schedule for reconciliations. Following that, they must assign individuals or teams to handle specific accounts or types of reconciliations to ensure accountability.
Leveraging reconciliation tools can streamline the process. Keep in mind that these tools usually have numerous updates. So make sure your team knows about any recent changes and how to use new features effectively.
4. Adopt automation.
Automation solutions can provide real-time updates to accounting records. This allows accountants to seamlessly access and work with the most current data. And so much time can be saved when using technology in various facets of the accounting department. Your staff will be happy to delegate redundant and mundane tasks to a machine.
What's more, implementing artificial intelligence (AI) can allow companies to detect unusual patterns and anomalies in financial transactions, enabling decision-makers to flag these activities for further investigation, bolster transparency and contribute to a more secure financial environment.
5. Document procedures.
Document standardization ensures consistency in how tasks are performed, helps minimize errors and ensures that everyone follows the same guidelines. It even helps companies train new hires more efficiently.
To begin, businesses need to identify key accounting processes like accounts payable, accounts receivable, financial reporting and budgeting. The key is to be detailed when outlining tasks, responsibilities and inputs/outputs for each process stage. They can also create checklists to ensure that each step is completed and verified. When documents are ready, make sure to store them in a centralized database.
Considering the dynamic nature of the business landscape and its potential surprises, organizations can include procedures for handling exceptions or uncommon scenarios. This helps ensure that employees know how to navigate situations that fall outside the standard process. Lastly, revisit your documentation periodically, as departments should always be on the lookout for better and new ways of doing things.
6. Be audit ready.
Auditing offers numerous benefits to organizations, such as fostering transparency, assessing the strengths and weaknesses of the business, preventing fraud and ensuring compliance with regulations. That's why being audit ready is not only beneficial for the audit but can also be your strategic advantage in 2024.
To achieve this, it is critical for companies to learn the ropes of their processes, create documentation standards, provide the right amount of information, meet deadlines and be on their best behavior. Consequently, they can facilitate smoother audits, reducing the time and money spent during the process.
7. Continuously improve financial processes.
Besides improving productivity, identifying and eliminating unnecessary costs or inefficiencies in financial processes can result in significant cost savings for organizations. This may involve automating manual tasks and leveraging advanced accounting software and enterprise resource planning (ERP) systems to track costs and identify areas of overspending or inefficiency.
The bottom line is that having an effective accounting team can be your competitive advantage in 2024, as it helps you get a clear picture of your business's financial health and make more informed decisions. Strategic investments in tools to enhance financial processes and the use of technology can be pivotal for reaping these benefits.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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