Rethinking Accounting for Small Businesses: Is Your Approach Outdated?

If nothing else, the COVID pandemic has taught us that many of the things we once held dear can change, if they have to. For better or worse, many traditional processes did change – education, service delivery, retail shopping, and more. 

​A staffed payment station in a local café

And while we yearn for a return to normal, we’re constantly challenged with answering the question, “What is normal now?”
 
The practice of accounting has not been immune to these challenges. During the pandemic, most businesses were forced to rethink their basic accounting processes and structures just to survive. While remote work and part-time bookkeeping has been a long been a staple of many small businesses, many larger enterprises have been forced to re-think how to execute their missions in light of mass shutdowns.
 
But what is normal going forward? What, if any, of the revelations and lessons of the past 2+ years can and should be brought forward and adapted as the new normal? 

​Granted, some of the most basic tenants of accounting and internal controls need to remain in place. For instance, document security, segregation of duties, and cash management principles all still need to remain in place, but how can and should they be executed?

Hybrid Work Tools
In our practice of providing fractional accounting resources for small to medium sized businesses and nonprofits, pre-pandemic we saw a fair number of our engagements involve either remote or hybrid work. However, during the first year of pandemic, the distribution shifted dramatically to almost entirely hybrid or remote. And while we are beginning to see more engagements require at least some component of onsite work, the balance is still strongly in favor of the hybrid or remote work environment.
 
So, what does this mean for the small business? There are many tools available to enable the hybrid/remote processing of day-to-day accounting transactions. And while we’re not advocating the use of any particular products, the following examples come to mind: Quickbooks Online, Office 365, Dropbox, Google Sheets, 3rd party payroll providers, Bill.com. Still there are many other online accounting tools that are available to facilitate this move to a more permanent, sustainable online experience.

Workflows and Processes
Change is difficult! But with unemployment in the accounting and finance sector currently at an astoundingly low 2% business owners and managers will need to engage with their employees to develop workflows and processes that meet the needs of the current generation of accounting professionals to

• Provide recruiting advantages
• Achieve a better work-life balance
• Empower employees
• Improve employee retention

 
On the other side of the ledger (we accountants can’t help ourselves!), the changes are difficult in that they require organizations to seriously rethink their cultures and how to integrate these new processes. Of course, internal controls cannot be overlooked in this process, and moving more and more data and process to cloud environments increases the risks around cyber security. These challenges are all manageable but require some degree of analysis and collaboration across organizations.

Productivity
Back in 2002, in his book titled Managing in the Next Society, Peter F. Drucker wrote,

A knowledge-based workforce is qualitatively different from a less skilled workforce… Increasingly, the success, indeed the survival, of every business will depend on the performance of its knowledge workforce… In a knowledge-based organization, however, it is the individual worker’s productivity that makes the system productive.

How can we make our accounting workforce as productive as possible in this post-pandemic era? Focusing on the greatest value-add tasks first is crucial to achieving greater productivity moving forward. For most companies, this means focusing on:

• Conducting timely reconciliations
• Improving the budgeting process
• Formalizing accounts receivables (AR) policies
• Streamlining reporting
• Moving to cloud-based platforms

 
If you need an experienced accountant to help your company improve its accounting processes, please reach out to us! Our consulting accountants have the acumen needed to implement new tools, recommend process improvements, and increase productivity, especially among a dispersed workforce. Find out how we can come alongside your small business to better equip your team for success!
 
About the Author
Kurt Maas

Kurt Maass is a versatile and accomplished executive with 30+ years of experience in finance, accounting, and operations roles.  He has worked extensively in the wireless, landline telecom, ecommerce, manufacturing and energy conservation sectors, including serving as divisional and public company VP-Finance and CFO, in addition to public accounting firm experience. He brings a unique perspective from working with both very large companies (managing operational and capital budgets in excess of $2B annually) as well as very small early-stage start-ups, where he has actively participated in multiple equity and debt financing rounds. Kurt is very successful at implementing cost control measures while designing and streamlining processes that allow businesses to thrive.

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