By Martin Mellor ACMA, Senior Finance Management Specialist, Nottingham Trent University
Accounting activities may be performed by your core employees when your company is first starting out, with managers or even general office personnel taking over your day-to-day financial responsibilities. However, when your company expands and your accounts become more difficult, you’ll find that you’ll need to hire skilled employees to handle these issues – but where do you begin?
I’ve put together a broad roadmap for establishing an internal finance department to assist you in determining what roles you may need to advertise and fill in order to keep up with the growing responsibilities of financial management while remaining focused on what you set out to accomplish – operate the business.
Accounting’s Fundamental Roles
The first task you may need to delegate to a member of your team is bookkeeping. This function entails the daily entry of fundamental accounting data into your accounting software system, such as raising sales invoices and recording purchase invoices and cash receipts/payments, as well as maintaining accurate, reconciled totals for monthly, quarterly, and annual figures. They may also handle petty cash, and the data they collect can be utilized to file your VAT returns and keep track of your financial performance. Most good bookkeepers don’t cost the earth and they can be worth their weight in gold!
Taking care of accounts payable/accounts receivable is perhaps one of the most crucial jobs in any firm.
Last but not least, payroll personnel are responsible for monitoring employee compensation and ensuring that tax, pensions, NI payments, holiday pay, and earned overtime are all accounted for and included in their salary calculations. Payroll staff is also in charge of administering the actual payment of employee wages, but with payroll software, this may most likely be done in addition to the activities listed above – at least at first.
Accounting positions at a higher level
After you’ve covered the basics, you might find that you need to hire more qualified employees to handle other financial duties in your expanding SME, such as:
- Accounting manager – someone who supervises the core accounting staff (described above) and is responsible for managing processes as well as establishing internal accounting and auditing policies and controls to prevent fraud, protect the business, and ensure compliance with statutory and regulatory requirements.
- Credit controller – this is a step up from accounts payable/receivable, and it entails making decisions about customer credit, managing creditor debts, checking credit ratings, arranging terms and conditions of credit contracts, negotiating overdue debt payments, and, if necessary, initiating collection proceedings.
- .Procurement/purchasing manager – while not strictly a finance function, a procurement specialist can assist the finance team by identifying, comparing, liaising, and negotiating with suppliers to secure goods or services at the best price, thereby assisting you in managing your expenditures and budgets.
- Treasury manager – while a treasury manager is not required for every organizations, they can be a valuable addition to the team if you need assistance with investment options, banking relationships, maximizing credit facilities, and lowering financing expenses and fees.
- Financial controller – once your company has reached a certain degree of success, it may be worthwhile to hire a financial controller. They handle immediate financial management difficulties as well as more advanced accounting activities including reporting and analysis, planning, and project management, collaborating with other senior personnel to streamline your operations.
Supporting your accounts department with outsourced services
You may need to hire a finance manager or director at some point, depending on your present and developing needs, to draw together the information offered by the various roles listed above for a more strategic level of support.
