5 Accounting Mistakes to Avoid for Thriving Mid-Market Businesses
Hey, business leaders! Running a growing mid-market company is a big deal. We get it, you’ve got a lot on your plate, and sometimes accounting takes a back seat. But let’s be clear: overlooking accounting can set you up for major pitfalls. So, let’s dive in and fix that, shall we?
1. The Importance of a Solid Three-Year Financial Plan
It’s More Than Just Numbers
A three-year financial plan is crucial. Why? Because it gives you a roadmap for your company’s growth, profitability, and liquidity. Each aspect is vital; ignoring one is like driving with a flat tire—you won’t get far. Your plan should be both top-down (strategic objectives) and bottom-up (operational details), aligned to fuel your growth.
Balancing Growth, Profit, and Liquidity
You need to grow, sure. But growth needs to be profitable, and you should have enough cash to support it. That’s where a balanced plan comes into play. A well-balanced financial plan makes sure you’re not just sprinting, but sprinting in a direction that makes sense.
2. The Must-Haves for a Quick Accounting Close Process
Time is Money
Closing your books fast, ideally in five days or less, is important. It frees you up to focus on growing the business. To make this happen, assign team roles and responsibilities clearly. Know what you can prep in advance and get it done.
Don’t Skip the Review Cycle
Timely and complete review cycles help you catch errors early. This includes monthly reconciliations of key balance sheet accounts, so you’re not hit with surprises later.
3. Why Monthly Financial Reviews Are Non-Negotiable
It’s Your Reality Check
End-of-month reviews let you compare your actuals against your financial plans. It shows you where you’re excelling and where you need to improve. If you’re missing the mark, adjust your forecasts.
Engage the Leadership Team
Financial reviews aren’t just for the finance team. Get your leadership team involved. More eyes mean more perspectives to refine the plans.
4. Picking an Accounting System That Grows With You
Don’t Cut Corners on Your ERP
The right ERP system can scale with your company’s growth. Find one that handles all your specific needs, like inventory or job costing, without relying too much on add-ons.
Seamless Integration Matters
Your ERP should integrate smoothly with other software like CRM or tax planning. This keeps data flow streamlined and reduces manual labor.
5. Managing Your Accounting Team Effectively
It’s All About the Team
The finance team is crucial. Keep them motivated with clear goals and regular one-on-one meetings. If they’re growing with the company, you’re on the right track.
Keep the Feedback Loop Open
Consistent personnel reviews are non-negotiable. They help your team know where they stand and what they need to improve. Hiring slow and firing fast ensures you keep the best talent around.
How CCN Can Help
Navigating the complexities of accounting in a growing business is tough, but you don’t have to go it alone. From filling personnel gaps to managing ERP system assessments, we’ve got you covered. So, how about we join forces and make your financial operations bulletproof?
And there you go! Follow these guidelines, and you’ll sidestep the common accounting pitfalls that many growing businesses face. Ready to tighten up your financial game?
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