As businesses develop and reach the mid-market level, their executives frequently face the challenge of reorganizing the back-office structure, policies, and procedures to keep up with the changing and expanding bookkeeping and accounting requirements of the business. Consequently, the volume of day-to-day accounting tasks rapidly becomes overwhelming, and the quality of the organization’s financial data suffers.
Automate: It is essential to automate as many manual processes as possible using bookkeeping and accounting software and integrated applications. In addition to saving you time, automated processes improve the punctuality and veracity of your financial documents.
Save Money: Outsourced bookkeeping and accounting services can help you identify other areas of your business where costs can be reduced, revenues can be increased, or profit margins can be strengthened.
Through outsourcing, implement bookkeeping best practices in your mid-market organization: With a scalable, outsourced back office, you can use your financial reports to make data-driven decisions to enhance your business, management, and productivity to take your company to the next level.
Without a well-functioning back office, it is unfortunately impossible to operate a successful business. Therefore, business executives must consider the best practices, policies, and procedures for maintaining their back offices, business operations, and management decisions to maintain financial health and continue expanding.
5 Bookkeeping Best Practices for Mid-Market Businesses
Due to the much lower demand, manual bookkeeping processes are more manageable in smaller enterprises. Smaller businesses must keep up with fewer transactions, employees, and vendors, among other factors. As a result, manual bookkeeping and accounting procedures are more realistically feasible.
As a business expands, its volume of transactions, employees, and suppliers all increase. Keeping up with bookkeeping and accounting can rapidly become impossible if manual processes are still in use. Consequently, it is necessary to automate as many manual processes as possible using accounting and ledger software and integrated applications.
In addition to saving you time, automated processes improve the punctuality and veracity of your financial records.
2. Utilize Integrated, Scalable Accounting Software
When automating your bookkeeping and accounting processes. Be sure to select software and applications that are scalable and compatible with your business’s growth.
Choose accounting software with an extensive list of integrated third-party applications to automate as many business processes as possible. Additionally, selecting software with strong integrations will help you streamline the workflow between your back office and enterprise management.
While there are various packages available with the most popular accounting software (such as the products available with QuickBooks or Sage), you should choose a software product that allows your business to expand so that you do not have to transition to a new product too soon.
3. Be Meticulous Regarding Your Financial Close (Month-End Close) Utilizing Continuous Accounting
What is the monthly close? It is a crucial bookkeeping procedure that must be performed reliably at the end of each month-long fiscal period. At the end of each month, your business should finalize its transactions, financial activities, and documents for the preceding month. This ensures that you have a definite and well-defined timeline for submitting financial reports.
In addition, all of this automation and integration enables your mid-market organization’s bookkeeping to reliably keep up with not only your month-end close but also your daily close. A daily accounting close ensures that you always have access to accurate, up-to-date financial data and reports. This enables you to monitor your company’s performance, sales, costs, and cash flow weekly or even daily for enhanced management and strategic planning.
4. Protect Your Organization from Internal Fraud
As a mid-market business, your back office likely requires a sufficient number of employees to operate effectively. However, no enterprise with an internal bookkeeping and accounting department should ever employ fewer than three back-office personnel. To assure proper checks and balances, separation of duties, and separation of authority, at least three people are required. A back office with fewer than three employees is highly susceptible to internal fraud.
A well-staffed back office must have at least a bookkeeper, a controller, and a chief financial officer. However, larger businesses can benefit from having multiple bookkeepers and various levels of accountants.
5. Use outsourced accounting, bookkeeping, and CFO services
If implementing and maintaining these best practices seems overwhelming or too costly for your mid-market business to manage in-house, outsourcing your back-office function is a great option. Outsourced bookkeeping, accounting, and CFO services can save you time and money while enhancing your back office and maximizing the use of your financial data to enhance every aspect of your business.
What exactly are bookkeeping services?
A third party, such as a freelance bookkeeper or a bookkeeping and accounting firm that outsources its services, offers bookkeeping services.
What do bookkeeping services include?
Bookkeeping services handle the daily tasks associated with maintaining a back office. Bookkeeping services include the following tasks:
- Recording financial transactions
- Managing daily cash flow
- Creating financial statements (cash flow, income, and balance sheets)
- Managing accounts payable and receivable from customers
- Tax Preparation
- Audit preparation
In addition to these fundamental, daily responsibilities, outsourced bookkeeping services typically include controller services, CFO services, financial insights, and strategic planning.
Why outsource bookkeeping services? 7 advantages of outsourcing bookkeeping for mid-market businesses
- Save Money
In-house bookkeeping departments are substantially more expensive than outsourced bookkeeping services. A fully staffed bookkeeping and accounting department with a bookkeeper, controller, and CFO can cost hundreds of thousands of dollars per year. Comparatively, outsourced services typically cost between $5,000 and $12,000 per month, depending on the requirements and transaction volume of your business.
Outsourced bookkeeping and accounting services can assist you in identifying other areas of your business where costs can be reduced, revenues can be increased, or profit margins can be strengthened.
- Save Time
If your company has an internal back office. The proprietor is likely spending too much time on bookkeeping and accounting duties. As a business proprietor or supervisor, your time is the most valuable resource in the organization, and you should invest it in tasks of equal value.
Outsourced services will free up your time, allowing you to evaluate your financial reports, KPIs, and performance to improve your business strategy and decision-making.
- Dependable, Accurate, and Timely Reporting
You will always have access to reliable and accurate financial reports and metrics with outsourced recordkeeping and accounting. This means that you can rely on your financial data to avoid cash flow pitfalls, capitalize on financial opportunities, and make the best business decisions.
- Improved Administration and Operations
With an outsourced bookkeeping and accounting provider, you can rely on automated, streamlined, and integrated back-office processes to evaluate every aspect of your business’s financial operations. This allows you to readily evaluate the most and least profitable aspects of your business, allowing you to concentrate on the profit generators that will support your company’s financial objectives and promote growth.
- Enhanced Productivity and Efficiency
In addition to enhancing operations and management with data-driven decisions. An outsourced back office can help you identify efficiency and productivity drivers to maximize the return on investment (ROI) across departments.
- Lessen the Chance of Fraud
Additionally, outsourcing bookkeeping and accounting reduces the likelihood of fraud affecting your business. With outsourcing, you can always rest assured that the proper number of people are handling your accounts. In addition, you can rely on tried-and-true software and security solutions to safeguard your data.
- Promotes SME Growth
Additionally, outsourcing can expand and develop with your expanding small or medium-sized organization. With an outsourced back office, you can easily augment the services you receive to ensure that your outsourced team continues to satisfy your business’s evolving requirements.
Implement Bookkeeping Best Practices in Your Mid-Market Organization Via Outsourcing
Back-office implementation of a variety of best practices is facilitated through outsourcing.
Outsourcing is a cost-effective and straightforward method for implementing sound policies and procedures with the aid of efficient accounting software and a highly skilled team. With a scalable, outsourced back office, you can use your financial reports to make data-driven decisions to improve your business, management, and productivity while expanding your company.
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