Rule #1: it all starts with standardising Accounting Processes

Let’s cut to the case: when talking about accounting processes there are three main type of processes. The individual transactions, batch transactions, and data management. The first type of transactions are one-time transactions like issuing an invoice, while batch transactions involve multiple transactions like payroll. Data management includes all the processes to facilitate both individual and batch transactions, therefore needing to be as efficient as possible.

In order to maximise both efficiency and accuracy, in an ideal world each single process related to data management would be standardised. When looking at the identification and solutions of breakdowns within an accounting department, it’s essential that organisations truly understand the role of the back office. When talking about smoothening accounting processes we’re automatically talking about a properly operating back office as well.

It all starts with standardising

As with all processes that strive for effectiveness and efficiency, it all starts with standardisation. That means: a written, agreed-on set of rules taking away all inconsistencies. Although this may sound pretty obvious and logical, most smaller companies don’t have any predefined standardised policies. In fact, small teams are giving their most to help the company grow and integrating standardised policies could lead to a certain degree of uncertainty. Company processes are not stated in written procedures but happen automatically. Although this can turn out to work just fine, it is important to state that errors are very likely to occur, not even mentioning the lack of efficiency.

For the greater good

Standardisation is luckily the main key to more efficiency and accuracy in the long term. That, however, also means that we should stop thinking in one-fits-all approaches. Standardisation may stand for a predefined set of rules, but that doesn’t mean that there’s no room for a tailor-made solution. Standardising accounting processes therefore doesn’t only involve manager approvals, but also ensures proper communication between, for instance, the accounting department and the back office. But, be aware that it doesn’t stop once your accounting processes are standardised. As a business develops, standardisation will also need to be evaluated from time to time. Don’t forget: what you’re trying to accomplish with standardisation is being less dependent on one entity, but doing things for the greater good.