As your company continues to grow, the financial department may need extra support. How do you know when it’s time to start expanding your accounting and finance department? Here, we go over three signs that indicate it’s time to hire new accounting and finance staff.
1. You’re Always Behind on Invoices and Bills
If your accounts receivable and payable employees are always behind, it can be detrimental to your company’s financial health. Paying your bills late will incur costly interest fees, while sending invoices to clients late will interrupt your cash flow.
If your company is growing and your accounting employees are stretched thin, consider hiring new employees to ensure you stay on top of bills and invoices.
2. You Find It Difficult to Make Major Financial Commitments
An organization will have to make major decisions regarding financial commitments at all stages of growth. You will need to decide how and when to invest in fixed assets like buildings or machinery, make commitments to new salaries, determine when to borrow funds for expansion, and how to handle working capital investments like inventory.
If you find your team unable to make informed decisions in any of these areas, building a solid finance and accounting team can help in two major ways: cost accounting and cash flow projections.
Cost accounting is the process of measuring costs and relating them to activity. This is crucial for making informed financial commitments. With cost accounting, you can understand the impact of profits and cash flow on an incremental level with every sales, operational, or financial decision to be made.
Cash flow projections will help you place value on different financial decisions and compare them to one another, making sure you make the most informed choices.
3. You Can’t Accurately Predict Financial Trends
To be successful, your organization should be able to make predictions about future revenue, operating costs, and the assets you’ll need to expand when the time comes.
Consider hiring finance employees with the right skills to implement the prediction process, so you can make future predictions and link them with present-day efforts. A detailed projection backed by financial data can help a company come together around a shared vision and then use that vision to create concrete steps and measure progress. Having a clear and realistic set of goals will also enable you to identify when you are straying from your goals and alter your course as soon as possible.
As your company grows, financial statements can be used to assess your original predictions. An analysis of sales trends and costs can then be integrated into your projections to continuously build a more accurate representation. The ability of finance and accounting teams to analyze past sales strategies and combine that with knowledge of current sales leads will enable you to predict future revenues.
Looking out for these signs will help make running the financial side of your business easier and ensure you enlist extra support at the right time.