When customers, clients and entrepreneurs visualize any business, they usually imagine the operation’s storefront, logo, products, services, or marketing campaigns. In other words, most people choose to define businesses by their brands, products, services, ideas, and messages. Behind the attractive exterior and desirable offerings, however, the heart of most successful businesses is a well-functioning back office that provides the platform for organizational growth. In essence, your company’s back office is the lifeblood of everything your business does and will do. This article will look at the role of a company back office and how to optimize it.
The efficiency and reliability of the back office ensures the health of your business… It allows you to continue to do what you do best – focus on your core competencies.
The Role of a Company Back Office: Foundation for Financial and Operational Success
Your small or medium sized company’s complete back office may consist of HR, Operations, IT, and Accounting and Compliance. The back office should stay abreast of ever-changing federal regulations, safety laws, and employment standards. In addition, it should also maintain up-to-date information systems and bookkeeping records.
The role of a company back office should help strengthen the infrastructure of your business by establishing and maintaining efficient business operations. In this article, we focus mainly on the accounting and compliance functions of your back office.
Layers That Build The Accounting Foundation Of Your Back Office
There are 4 layers that build the accounting foundation of your back office.
Accounting Systems Design and Optimization
Policies and Procedures
The design and implementation of your company’s policies and procedures covers everything from daily financial operations, weekly and monthly reporting, due diligence, and bookkeeping and accounting best practices.
Compliance is the necessary and legally required responsibilities with respect to financial reporting and record keeping. Efficient bookkeeping and accounting practices involves maintaining accurate financial records essential to tax compliance and for avoiding audits, and enables you to keep track of your company’s financial (and overall) wellbeing.
Staffing and the Cycle of Hiring
Management Reporting will help determine a budget for the number of employees needed for profitable operation. The back office must also be able to synchronize the timing of onboarding and training new employees with the demand created by your growing business.
Transform Your Back Office from Mundane to Miraculous
Establishing a smart back office helps create operation efficiency and build a strong financial foundation for your business. With a streamlined, integrated system, and accurate data, you can leverage a wealth of financial information to optimize every business decision you make. Management accounting and cash flow forecasting can be tailored to accommodate successful strategic planning.
System Optimization: Recognizing the Difference Between a Successful or Struggling Back Office
A neglected back office is one that seems to work against you rather than for you. In other words, if you still see your back office as a mundane chore that primarily exists to take up your valuable time, then you are overlooking one of your company’s greatest assets.
For example, business owners often neglect their back offices. They do not take advantage of the financial information at their fingertips. As a result, they find themselves in cash flow crunches. These business owners often become too caught up in doing what they do best… They are focusing on product development, sales, and networking. Without a full accounting department in place, they may not getting the kinds of cash management tools they need to forecast their weekly and monthly needs. As a result, these business owners tend to find themselves reacting to negative cash crunch situations. If they spent more time on the back office, then they could be proactively avoiding cash shortfalls.
What sets a successful back office accounting solution apart from a struggling one is its ability to help business owners foresee cash flow issues and take proactive steps to avoid these sorts of challenges before they occur. In addition to cash flow forecasting, an experienced accounting team will also help you with the following:
- Pinpoint and correct costly inefficiencies in your business
- Predict your cycle of hiring
- Establish policies and procedures that work for your business’s bottom line rather than against it
Next Steps For Improving the Company Back Office
So, what are the next steps for improving the company back office? Outsource back office functions. Then optimize your small business accounting system. Finally, eliminate the burden. The right online accounting and bookkeeping services provider can help you create a smart back office and strong financial foundation to drive growth and success in your company. An outsourced accounting department as part of your back office frees up your time by tackling day to day bookkeeping and accounting tasks. In addition, an outsourced accounting department could be providing the financial information you need to make data-driven, strategically smart decisions for your company’s future.
With the right mix of team and technology, you can build your company on top of a strong financial foundation.
To learn how your business could benefit from shoring up your financial foundation with outsourced bookkeeping services, download The Smart Back Office below.
With 20+ years of experience providing professional bookkeeping services to businesses like yours, our back office experts can help you eliminate the learning curve by setting up your back office right the first time. We will help you optimize your small business back office efficiency to improve operations, streamline technology, and leverage financial information to accelerate your company’s growth.
Stephen King is a guest blogger at The Strategic CFO. He is the President and CEO of GrowthForce, The Strategic CFO’s strategic partner. King has 3 decades of experience in accounting system design, technology development, and management services.