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Navigating The Biggest Accounting Problems Growing Companies Face

If you are an entrepreneur, one of the biggest challenges you face is how your company adapts to growth. Growth is a sign that your business is doing something right and going in the right direction. But, sometimes there are growing pains for companies as they move to the next stage. While you are focusing on growth, growth may be getting in the way of efficient operations, especially efficient accounting operations.

What Accounting Problems Does Your Company Face?

While these are not the only problems your company could be facing, these are some of the most common challenges.

  • Accounts receivable outruns sales and the ability to collect payments
  • Inefficient accounting software
  • Inadequate internal systems and procedures
  • Managing overhead costs
  • Closing the books accurately and timely
  • Managing payroll
  • Tracking stock option grants and other issuances

Do you recognize challenges with these areas in your own company? If so, they could have a bigger impact on your profitability and growth than you realize.

How Do These Issues Impact Growing Companies?

As your company grows, it becomes harder and harder for you, as the owner, to keep track of the company’s accounting functions. You have other responsibilities to focus on, like pursuing your vision for the company. When big-picture decisions are at stake, concerns about budget and cash flow may fall by the wayside.

In times of sharp growth, accounts receivable increases quickly, and without the ability to collect efficiently, this impacts your cash flow. You may have invested in basic accounting software when your company first started, but it is likely that software is not enough to meet your growing needs. However, it costs you time and money to integrate more sophisticated software, functions, and resources into your business operations. And, without a reliable accounting and finance function, you have no dependable resource(s) to lean on.

When your company does not have the tools and resources needed to support your accounting operations, you will impede your ability to effectively managing your business’ funds.

How Do You Solve These Problems?

For emerging companies, there will always be accounting challenges as you grow. If your accounting operations are facing these problems or similar ones that impede growth, you need to take action to fix looming issues.

Start by hiring a good accountant who can help manage all the accounting functions in your company. An increasingly popular trend for emerging growth companies is to consider outsourcing some or all your accounting services. This model allows for scalability and cost-effectiveness in that you pay for the exact services and resources you need when you need them.

An example of one small step a strategic finance and accounting partner will take to remedy issues with accounts receivable is sending automatic reminders to customers throughout the accounts receivable aging process. This allows your company to collect payments faster and increase your cash flow.

Ultimately, entrepreneurs who are helming growing businesses should take an active interest in their accounting operations. While it may not be your specialty, it is the place where all funds flow in and out of your business. You can outsource the work, but you need to know what is going on if you are going to drive success. The right partner will be successful at managing your finance and accounting functions while ensuring you, as the leader of the business, fully understands where your finances stand.

Want to learn more about outsourcing your accounting services? Schedule a free consultation with G-Squared now.

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