Posted 6 months ago by Tracy
As businesses grow, many owners come to the realisation that additional support is needed to ensure they have full control and awareness of their financial situation. This could include hiring an accountant or bookkeeper or even bringing in a permanent member of staff.
Building an accountancy team is a significant undertaking, however, and if serious thought isn’t given to the personnel within it and the duties they need to complete, it won’t offer the benefits that should be seen by having professional management of your financial accounts.
So, how do you go about organising an accountancy team? The first step is to understand your business and to be clear about your needs. For many small businesses - including start-ups, freelancers, contractors or lifestyle businesses - hiring a bookkeeper or accountant will likely be sufficient for your needs.
A bookkeeper will ensure you have a solid record-keeping system, handle financial transactions and manage your books for a relatively low cost. Employing a bookkeeper makes sense if you don’t have the time or knowledge to manage the financial aspects of running a business and you need to keep costs down.
Should your business grow or your needs change, hiring an accountant may be the logical next step. If, for example, you bring in an employee, an accountant will be able to help manage payroll, VAT, corporate tax, billing, cash flow and the like to ensure your company is stable financially or highlight if there are potential issues ahead.
A bookkeeper and an accountant can form a very efficient accounting team for a small business, perhaps with a bookkeeper managing the books on a regular basis while consulting an accountant for year-end tax planning. If, however, you make the decision to bring your accounting in-house the key will be to develop a team with the right mix of skills and knowledge to ensure operations continue to run smoothly. In order to do this, it’s important not to just rush straight into hiring a complete team. Instead take the time to think about your financial situation, what you need from your in-house accounting department and how they will work with an external resource.
As you look to develop the team that works best for your needs, it can be a useful exercise to create an accounting manual. This should provide the approved policies and procedures for all financial transactions to ensure standards are consistently maintained and adhered to by all relevant parties. Policies should cover areas such as cash flow, billing, account payable, petty cash and the like, stating what the guidelines are, who it applies to, why it must be followed and the position that is responsible for ensuring compliance. This document may also include a list of the duties that need to be completed by your accountancy support. When planning your team this will help to ensure you are clear on the positions you need to fill and the skills needed for each.
Developing your accounting manual will also help you to map out your accounting department structure, helping to clarify how many employees you need to manage the expected workload and whether you want to keep the resource in house or rely on external knowledge. It will also help you to think about the structure of your team. Do you need a chief financial officer (CFO) to head the team and focus on financial planning and strategy, for example? While this level of expertise can be of great benefit to company performance it is also an expensive addition so, again, focus on what you need from your team. If your company is in a major growth phase or is planning acquisitions or major financing, for example, a CFO will be of value. If business is more settled, however, it likely won’t be necessary and you’ll be able to focus on finding people to complete more basic tasks such as payroll, financial reporting, billing and so on.
Once you’ve made the decision to hire an accountant, it’s important to choose someone who has the right skills and experience to get the most out of your investment. Here are some key factors to consider before you make your decision.
In these days of cloud accounting, it’s no longer essential that your accountant is based in the local area, so ask yourself if you’re happy to collaborate online or if you still prefer face-to-face contact.
Not only should you look for an accountant who has experience of completing the tasks you’ll require of them, such as preparing tax returns and managing cash flow, but you should also look for someone who has worked with companies of a similar size and revenue as your own. Even better would be someone who has worked with companies in similar sectors. If you’re planning on significant growth, don’t be afraid to ask potential candidates to share examples of how they’ve managed this with other clients.
As well as having the right experience, your accountant should also have the right qualifications. In the UK, the AAT qualification is typically the minimum level expected of an accountant, but a more experienced chartered accountant will have the ACCA, ACA or CIMA qualifications.
Choosing the right accountant can have a major impact on your business, so don’t rush into it. Ask around for recommendations, visit the ICAEW or ACCA websites for recommendations, read online reviews and speak to a few practices before making your decision. And don’t forget to review your decision on a regular basis to ensure you remain happy with your choice.
Whatever the structure of your team, it’s essential that each member has access to the information they need when they need it and wherever they may be working from. Choosing the right accounting software is central to achieving this. Look for a solution that offers real-time reporting, top-grade security and is scalable to accommodate new users with access permissions tailored to their needs.
Once your team is up and running, take the time to check in, monitor progress and ensure it is operating as expected. It may be that new tools are required to streamline tasks or additional resource is needed at certain times, so maintain regular communication whether team members are internal, external or both.
There’s no one-size fits all when it comes to building an accounting team and your needs may differ over time and depending on the sectors in which you operate. For small businesses, the core of your accounting team will likely begin with your bookkeeper or accountant so take the time to find a team you can rely on to ensure smooth financial operations as your business grows and changes.
To find out more about how AccountsPortal can support your business as you develop your accountancy team, get in touch with us via our support pages.