The financial area is one of the four fundamental pillars that every company must develop and strengthen. As the business grows and becomes a company, that unit must also evolve to fulfill a fundamental mission.
The following would be the natural process of evolution of the financial area of a growing company:
- Being a small business, it may be enough for an outside accountant to visit the small or medium-sized business to review the documentation on site and then pick it up and process it in their own accounting office. A week later, he is presented with a neatly organized folder containing the properly organized documentation, the tax returns that the company must deliver and pay, as well as: a small brochure with the financial statements of the business and other valuable information. grows and as a medium-sized company, with more employees, more turnover, more tax obligations and more complexity, it becomes a necessity to hire a plant accountant. A single person who will take care of all these accounting issues. From the organization of the documentation, the processing, the registration and the preparation of the Financial Statements, as well as the tax returns. Initially, this Accountant may also manage the company's treasury (which I do not recommend); but it does not sign in the current accounts. In a third level of evolution, the company being already of medium size, perhaps it adds other companies that also require their own accounting. The documentation increases, the number of employees also and the complexity is greater. What this medium-sized company does is hire accounting assistants and a general accountantthat manages that work team. At this point the company should already have a treasurer on its payroll (we will talk about this in a later article). It is usual for the Accountant General to be entrusted with the Human Resources Area. If the company is understaffed, perhaps forty or fewer people is not a major problem; but just as that area will also become independent when the number of employees is greater. Of course, with a Plant Accountant, the company must already have acquired an " accounting program " in which to record its financial transactions. There are hundreds of options on the market now from $ 1,000 to $ 1 million When the business grows and approaches the upper limits of a midsize businessit must strengthen its Financial Area. Perhaps your sales already exceed two hundred and fifty thousand dollars a month, perhaps your payroll is of more than 100 workers or perhaps the complexity of the transactions warrants evolving again. In these cases, the presence of the Financial Director arises in charge of a professional, usually with an accounting training in the beginning; But he decided to specialize in banking and finance. This is what I recommend to my clients, a person who went through the entire process of becoming from Assistant Accountant to General Accountant and who later trained to be a Financial Manager. We will also talk about this position in another article.
All of the above is fine and should be the natural process in every small and medium business. But for what? What is the meaning of this investment in the Financial Area that businesses should carry out? The answer is summarized in the mission that we offer for the General Accountant of any business, small or medium, is the mission and the reason for being of Accounting. I summarize them in the following sentence:
"The mission of the General Accountant is to provide the Management with reliable, useful and timely financial information for decision making and managerial control."
Of course, you must comply with formal duties and tax obligations. Of course, you must also maintain a strict order in the filing and classification of documentation. You must also keep consistent records and apply accounting standards and principles rigorously. But all of the above and any skills, talents and activities that you carry out for the company must be oriented towards that: to deliver timely, reliable and useful financial information.
The entrepreneur who wants to achieve more sales, more profits and more wealth needs to make the right decisions, for that he needs quality information. Much of this information, not all, must be provided by Accounting. That information must reach you in a timely manner, it must be reliable, and it must be useful.
What does the entrepreneur do with this information? You know the true financial situation of the company, understand what the financial results of your business are, determine if you are getting the results and profits you want, and know how your business funds originate and how they are used. With all this information, he makes decisions, solves problems, confronts reality with his expectations and controls whether his work team is producing the desired results in each of the company's units.
Financial information is vital when you want to take your business to the next level of growth.
Make the effort that is necessary and do not skimp when it comes to hiring a good Accountant. This professional must be a systematic, methodical, organized, capable, competent, qualified and responsible person for the results that we have indicated.
To complement this process and what you have just read, also study these extremely important articles:
What an Employer, Accounting, and Weekly Availability Report DOES Need to Know - Where's the Money?
