In the final weeks of December and into the new year, most accountants enter a critical and demanding season. While they may be dreaming of holiday fun, most of their days are spent focusing on vital year-end tasks. This includes the financial year-end closing, reporting, budgeting, W-2 and 1099 preparation, and adoption of new regulatory requirements and standards.
Organizations often try to get by with insufficient accounting resources, inefficient processes, outdated systems, and a lack of insight into their financials.
Imagine having an accounting department with enough staff to maintain the day-to-day accounting function while also completing the additional year-end demands capably and on-schedule. You would have specialized accountants to provide forecasting and strategic insight. Department processes and systems would be up-to-date and would support your team in performing accounting and reporting tasks efficiently and accurately.
An accounting department like that sounds ideal, but it may not be your reality. The additional strain during busy times of year often highlights the challenges and limitations within your accounting department.
If you are struggling to meet the demands of year-end, it may be time to assess some key areas within your accounting department.
A 2017 study found that 62% of accounting and finance departments are understaffed. Operating with fewer staff than you really need can lead to accounting cycles that drag on too long, financial data that is disorganized, and employees that are overwhelmed.
Considering how competitive the talent market is right now, turnover is a realistic concern. The current unemployment rate for accountants is less than half the national average for all industries. New CPAs enter the ranks every year, but not nearly enough to make supply higher than demand. Companies that are already struggling may not have the capacity for the time-consuming process of recruiting in this competitive environment.
Company leadership relies on accurate, clear financial information in order to make important decisions about the future. When you lack experienced accountants to answer complex questions and translate data into insight, these crucial decisions may be based on an inaccurate or incomplete picture.
Accounting departments are also responsible for keeping up with changing regulations and maintaining compliance. Without dedicated, knowledgeable staff to focus on special projects and implementation, your regular accounting function will continue to experience additional strain.
Your accounting processes and system should support you in accomplishing critical tasks, but outdated technology and an over-reliance on manual work can slow you down. Inefficient processes waste time and lead to errors, inconsistencies, and oversights within your financial data. These problems are often first discovered during the year-end close.
Organizations often try to get by with insufficient accounting resources, inefficient processes, outdated systems, and a lack of insight into their financials. While this may be a common experience, it puts business owners and decision-makers at a serious disadvantage.
Challenge yourself to consider how outsourcing can become part of your strategy for building your ideal accounting department. The ability to do more, work faster, and accommodate growth does not have to be dependent on the traditional, in-house model.
Whether you are looking to outsource all or a part of your accounting function, collaborating with a team of outsourced accounting professionals provides you with a wide range of flexible solutions. Outsourcing can help safeguard you from staffing challenges, provide access to experienced staff to answer complex questions, and improve your accounting processes and systems.
If you need help assessing your accounting department and addressing the gaps, P&N can help.