Good Accounting Practices Must Be a Top Priority

Good Accounting Practices Must Be a Top Priority


Office staff doesn’t know enough about our accounting practices. Or accounting in general for that matter. The accounting says they’re overwhelmed. If anyone in that department is out sick, they get behind. Space is limited in accounting. They’re dealing with a lot of interruptions. We could be doing a better job with the numbers side of the business. Any suggestions?

Thoughts of the day: Accounting practices are essential to a healthy business. Pay attention when accounting says they’re overwhelmed. Put accounting in an area where they can’t be disturbed is a good idea. Involve people from around the company in accounting functions. The more your people understand what makes the numbers work. The more they can help ensure a profitable year.

Best accounting practices to follow

Good accounting practices are a top priority. However, the more interruptions in accounting, the worse things get. Mistakes get made. Things get lost. Priorities get interrupted. When it comes to managing business financials, you don’t want that.

Firstly, having people in accounting interacting with the rest of the company. However, there’s a time and a place to do that productively. For example, set the finance department up in the same office space. Moreover, limit access to the finance department to cut down disruptions. Keep out people who would be a distraction. In addition, make sure that records are kept locked up. You don’t want sensitive information leaving the department. After that, give finance their own printer. That way checks and reports they print remain within the department.

Make sure that accounting is well staffed and trained. Make sure they stay on top of accounting practice tasks. For example, invoicing, collections, managing inventory. Also reporting, and analysis. Likewise, getting behind in these areas can spell big trouble for the company.

Accounting practices fosters accuracy and transparency

Meanwhile, look at seasonal business swings. Workload might increase or decrease significantly during such times. Don’t wait until the last minute to hire temporary staff. Line up an outside agency to help with short bursts of workload. Turn to your accounting firm for additional analysis help in peak season. Only hire people whose background checks come back pristine. Don’t take risks with your money.

After that, assign analysis to a top person in the finance department. Set up key measure reports for staff to populate and graph. Expect weekly, monthly and quarterly reports on business finances. Look at include gross profit and net income. Also, consider the amount in accounts receivable. And its relationship to invoicing. Compare accounts receivable to accounts payable. Amount of cash on hand. Cash flow report, number of overtime hours, and amount invoiced. The list can seem endless. Agree on a standard set of items to track. The format in which they are reported simplifies things for everyone.

Financial health drives operational growth

Meanwhile, have others help the accounting department get its job done. Invoice data entry can be done by sales and operations personnel. They can also make calls to collect outstanding accounts. And keep a watch on overtime and help price out materials. Define accounting practice roles and expectations. Include turnaround times so everyone is on the same page.

Likewise, look for others in the company who gravitate to financial tasks. Recruit internally for accounting practices. Especially for such a sensitive area as finance.

Similarly, ask accounting to set up training programs. Teach employees from other departments about what makes the company profitable. The more employees understand their role in driving profitability, the better. Make sure they get reports on how they’re doing. So they can measure progress and fix problems.

Looking for a good book?Accounting for The Numberphobic; A Survival Guide For Small Business Owners”, by Dawn Fotopulos.