Accounting is an interesting, complex and often rewarding career, but being responsible for the financial ins and outs of a business, no matter how large or small, is bound to be the cause of some pressure. If you’re an accountant, then chances are you’re being kept awake at night by some, or even all, of these issues.
Cashflow is crucial for businesses of all sizes, and it’s often the accountants who are left to manage it. While there’ll usually be different areas of the finance team looking at the credit and debit side of things, it’s the accountant(s) who have to keep on top of the bigger picture. The time between goods/services being sold and invoices being paid can put a real strain on cashflow, but it’s the seemingly little things like paying for unexpected expenses that can really make an impact to the delicate balance.
Reconciling and Closing Out Accounts
Whether it’s month end, quarter end or the ultimate, financial year end, reconciling balances of your accounts and ledgers needs to be an exact art. If balances don’t agree at closing out time, it’s usually a case of trawling back through records and systems to find out exactly where the error lies, and often inconsistencies don’t make themselves known until reconciliation time. Outdated accounting systems or methods are often to blame for giving accountants nightmares at reconciliation time.
Preparing for Year End
Year end obviously needs to have a section all of its own! Whenever your financial year end is, preparing for it should happen all year round. Even when you are fully prepared, it’s a huge amount of work to have to check and review each and every transaction. Many companies even have internal or external audits around that time, which makes the pressure even worse. Without a system that’s error-free, efficient and capable, year end can take twice as long.
Managing receipts is a particular problem if there’s a high volume of employees with expense accounts, but even with smaller companies, the volume of expense reports and receipts can drown you in paperwork. Keeping a system for filing receipts doesn’t always help, because it’s human nature that some employees will forget to keep the receipt or lose the receipt. Receipts might even get lost in internal mail, or even disappear from your desk.
Controlling Petty Cash
You’re responsible for the petty cash ‘tin’, whether you physically have the key for it or not. The problem is that to people who come asking for petty cash for this and that don’t understand that it all adds up to a sizeable chunk of the business’s money, and if you have more than one petty cash location it’s even more tricky – all those small individual amounts that take even more time to summarize and reconcile. You have to be fully on top of access to petty cash, as well as control over who has it and where it goes.