I work with a lot of businesses. Every day I’m working with small business to help them find the best ways to optimise their software. It’s not rocket science, we are talking pretty much Xero, Payroll, WorkflowMax and Unleashed and the bits in between. Sounds simple enough, yes!
However, let’s remember that in general a business will be engaging with me because:
- They have experienced rapid growth, and systems aren’t keeping up
- Their advisors are not providing “coalface” operational support
- They suspect a staff member is inefficient, but unsure how to address it
- They know software is being under utilised
Now just to be clear, I’m not a born bookkeeper. I got into the business of running a team of bookkeepers and software implementers because of my interest in learning more about what makes small business tick. Hubby and I ran a residential property management business and over 8 years made a really good success of it. It sounds strange to say it now, but at the time I didn’t really understand why we had been so successful, and I certainly didn’t realise that others were not doing the things I did that I took for granted. What I eventually learned from that, was that my strength is in building efficiency –looking at the overall picture of how things are working and providing support to get the right systems in place with the right people.
So when I’m talking to a business owner about how their financial systems are working, this framework is always in my mind – it’s just what I do. I notice if a particular role is missing, or if the wrong person in the role, or there is inadequate support in any of a number of ways.
So here are 5 of my key check points:
Is the right person in the job?
I have helped businesses where the person who is in the financial role in the business, is just not the right person and their strengths lie elsewhere. Sometimes a decision needs to be made on whether the employee is going to be capable with training and support, or whether it’s best to restructure. Reasons this can happen:
|Job description was not accurate||Sometimes it happens that a business believes they have a certain role to fill, but when a new employee arrivesthey end up with a significant portion of tasks that were never in the job description.|
|Role has changed over time||Growth or restructure resulting in a role changing – the most common we see is a receptionist or communications person needing to taking on a financial role, or visa-versa.|
|New technology is being introduced||Sometimes longstanding employees just cannot cope with the introduction of new systems in a business – for any number of reasons. This could include digitising or introducing new financial software.|
|Growth in the role||When a business grows, so do the employee roles. Sometimes employees just don’t cope well with the challenges of added complexity, higher volumes and a need for higher productivity.|
Are the processes clear?
|A well organised space||A business with clear processes generally has well organised spaces. Desks are clear, filing cabinets (if any) are in order, and there is an absence of piles of paperwork, tools, boxes or other random items lying about with no clear purpose. This tells me that the business knows there to put things, in a literal sense.|
|Everyone knows their process||This is about everyone being clear about the processes they’re responsible for and how these affect others. Whether or not the business is using manual, digital, or automated systems, it is usually quite easy to see how well organised the financial processes are. |
I have worked with extraordinarily organised businesses using all manual systems, and businesses who the most up to date technology but are in chaos. E.g.
Only some employees are permitted to issue purchase orders
Workers onsite know they have to complete timesheets in order to get paid
There is an agreed way to utilise Xero POs and approval process for bills to be approved
Managers are confident they are in control of what’s happening in the business
And so on. If this isn’t happening there is likely duplication, miscommunication, unknown gaps with things falling through, and of course inefficiencies.
|Mechanism for change||Does the culture support constructive and continual improvement because nothing ever stays the same for long unless it’s stagnating.|
It’s quite common when I ask “Why do you do it this way” to get an answer “It’s always been done that way”. This can happen accidentally, just carrying on with no reason to review or change things. Frequently we find reviewing processes can result in just stopping doing a whole lot of stuff. Two of the most common examples would be reports being produced that no-one is looking at, and documents being printed and filed for no reason.
Are there effective tools?
|Strength of foundation tools||Many systems and processes should be running in the background all the time and not causing headaches or potentially massive loss of productivity. If this isn’t sorted when I arrive, then it has to be sorted pretty much before anything else happens. |
Reliable computer performance including Server or speedy and reliable internet connection.
Email is reliable and works.
Printers, scanners, mobile phones and other devices are working effectively.
|Appropriate tools||Are the tools being used are actually relevant for the business needs. E.g.|
Not trying to use cloud software where reliable internet is unavailable.
Ensuring systems work if businesses are out of internet or phone range.
The systems are not over or under specified.
These days cloud software including Xero is very low cost compared to a custom build and the implementation cost should also be reasonable. Investment in cloud technology should be completely financially justifiable in saved time, increased productivity and better decision making.
My view is to keep capital expenditure on systems to a minimum because financial software apps are developing so fast. Although it’s unlikely to find 100% match for what you need, the top software programmes are in continual development – funded by large numbers of subscribers. They are in a race to keep up with new customer needs and expectations!
|Is the software being used relevant||A common perception is that new software will solve all the problems.In many instances it will certainly help, especially if the business has grown and better financial information is needed for Job Management, Inventory, CRM or some other functionality. |
But I also do come across businesses who are what I would describe as software junkies. They are tech savvy and have downloaded and implemented what seems like every bit of even slightly relevant software known to man.
In my view what these businesses have failed to understand is that off the shelf cloud software will never fill 100% of a business needs, and it can be easier and more efficient to keep doing some things manually rather than try and clip on yet another app. It’s not just about finding the best match software, but understanding and agreeing what to do in which system.
Is there sufficient resourcing?
|The cost of space||More and more businesses are operating from home. Even with teams, many businesses have found they just don’t need an office so there is no desk space available for a part-time financial role. |
Also, when working from home many business owners prefer not to have staff someone coming into their space for privacy reasons.
For businesses with Offices, space can be a significant cost and it may not make sense to tie up a working space for a part-time role that doesn’t require a lot of interaction with other staff.
|Accountability||Privacy and accountability for Payroll is a biggie for many businesses. Besides the issue that a business owner may not want staff to know everyone else’s pay rates and pay outs, NZ legislation is notoriously complex and the potential liabilities are high. |
For the overall financial systems, if there is no one to take an overview role on the finances, this can lead to an increased risk of ongoing errors, periodic substantive errors and sometimes even fraud.
Where tasks are done by someone outside their speciality, there may be little or nocommitment to keeping up to date with changes or professional development in this area.
|Availability||If financial work has to be fitted in around other roles it can just keep falling to the bottom of the priority list. When it does finally get done it can take twice as long because no-one remembers what the transactions were about, and anything that perhaps got misplaced is now much more difficult to find. |
Sometimes it is an issue for a business if accounts are being kept up to date by staff in a part-time role and can only be carried out on certain days or at certain times. There may also be issues around cover during holidays or other times when the employee is away.
Outsourcing to a cloud bookkeeper who has team backup removes these difficulties. Work can be done any time, any day, and the worry of cover for absences just goes away.
|Expertise||In a smaller business there is usually little or no hierarchy of expertise in the finances so accounts it may not be reviewed by anyone for a long time. This can result in costly bills from the accountant to fix it up at the end of the year.|
It’s also common for the finances to be kept by staff who are not experts in this area. The tasks might be added to core roles of Reception, Administration, Co-ordination resulting in less than ideal skill levels for financial control.
Living Business can help you improve your systems and find the solutions best suited to your company’s needs. Contact me for a no obligation chat on 027 600 5794 or send an email to email@example.com.