As businesses grow, so too must their accounting departments. As your business becomes more complex, with more products, services, and customers, your accounting department will need to evolve to meet the new challenges. Here are four stages an accounting department can mature along with your business.
1. Seed and Start up Stage
At the beginning stage of your business - when you are just getting your business off the ground and maybe serving only a few customers - you might only need to track expenses on a spreadsheet or bank statements. As your business grows and you take on more customers, you will need to start using basic bookkeeping software and outsource the work to a bookkeeper to help keep track of your finances. The compliance and tax filing requirements will force you to obtain the services of one.
2. Small business
As your business continues to grow, and you begin to hire new employees, your accounting needs will begin to change. The accounting services you will need might include inventory tracking, managing payroll, and preparing quarterly tax filings. At this stage, you will need to consider hiring a full-time accountant or bookkeeper or using an online accounting service.
3. Mid-sized business
Once your business reaches the mid-size stage, so does the workload of your accounting department. More customers mean more sales and more transactions to keep track of. You may find yourself hiring additional staff or outsourcing some of the work to keep up with the demand. You'll also need to implement systems and processes to ensure accuracy, efficiency, and internal controls to protect your business from theft.
4. Large business
As your business grows even larger, the accounting department will need to grow with it. Not only will you need to hire more accountants, but you will require a different blend of skillsets to manage your finances. At this stage, you might need cost accountants, financial analysts, and internal auditors. You will also need to have systems in place to manage inventory, accounts payable and receivable, and payroll. You may find that you need to outsource some of the work to specialist firms or hire consultants to help with specific projects.
No matter what stage your business is at, it is important to have a handle on your finances. Having a good accounting department will help you to make sound financial decisions, keep track of your progress and spot any potential problems. It is an essential part of any successful business. Global Finance Teams is here to help you every step of the way, from seed to large business. Contact us today to find out how we can help you.