Strategies for Overcoming Accounting Challenges in Rapidly Growing Companies

Every entrepreneur wants to see their business grow. However, rapid growth also brings along significant operational & accounting challenges for small business. If you’re not prepared, it can quickly strain your staff and resources.

Below we’ve outlined the top accounting challenges of rapidly growing companies and how to overcome them.

Accounting Challenges in Rapidly Growing Companies

Issues related to accounting processes are common in fast-growing companies. Here are some significant ones:

1. Challenges with Accounts Receivable/Collection

The rapid growth of a business leads to a sharp increase in accounts receivable. If you do not have the mechanism to collect efficiently, your cash flow can be severely affected, and your liquidity can take a hit.

2. Inefficient Accounting Software

The basic accounting system that you adopted at the start may no longer be able to meet the needs of your growing business. You may need to invest in additional software with sophisticated features that supports efficient account analysis and decision-making.

3. Inadequate Internal Controls

Growing companies need to strengthen their internal controls with adequate tools and resources. Inadequate control can expose the business to security risks, reduced productivity, and revenue loss.

4. Challenges in Closing Books Timely

When a business grows in volume, bookkeepers often struggle to close books on time. Last-minute reconciliation leaves room for error, manipulation, and misreporting.

5. Challenges in Managing Payroll

As an entrepreneur, you cannot ignore payroll management if you want to avoid severe disputes later on. But as the staff grows, keeping track of their working hours and pay amounts becomes difficult, and businesses often turn to payroll specialists for support.

Overcoming Accounting Challenges in Rapidly Growing Companies

If the challenges in accounting processes are impeding business growth, entrepreneurs need to take action to solve the problem. The first step could be hiring a good accountant to handle the growing accounting functions.

A new trend in accounting is outsourcing all or part of the accounting processes to accounting outsourcing service providers. The service providers efficiently manage your finance and accounting functions while you can focus on core business functions.

Regardless of whether companies outsource their accounting process or hire in-house accountants, entrepreneurs need to take an active interest in accounting operations. They must understand how the funds flow and where the business stands financially.

Effective Risk Management in the Face of Accounting Challenges

Risk management is an essential part of the accounting process. But before delegating the task to accountants, the board must be clear about its risk appetite. What type or degree of risk are they willing to take? 

Once the risk tolerance level is communicated to the accountants, they can assess risks while preparing financial statements and create strategies to improve the accounting process.

Leveraging Technology to Streamline Accounting Process

Technology plays an essential role in improving the productivity and efficiency of the accounting process. Accounting teams that embrace technology are able to adapt better to changing circumstances and overcome challenges.

Here’s how growing businesses can leverage technology for accounting efficiency:

• Accept electronic payments for easier collection and settlement
• Store documents on the cloud for easy access, sharing, and collaboration
• Use accounting software to automate daily operations and cut down on time and staff
• Use mobile apps for streamlining business communications and managing accounts on the go

Conclusion

Rapidly growing companies, while enjoying the fruits of expansion and increased market presence, often encounter intensified accounting challenges. These challenges, if not addressed proactively, can become bottlenecks to sustained growth. Fortunately, by implementing robust strategies such as integrating scalable accounting software, hiring or consulting with seasoned financial experts, and establishing clear financial processes and controls, these companies can navigate the complexities of their expansion. Regular financial reviews, coupled with a commitment to continuous learning and adaptation, are also crucial. As these businesses evolve, their accounting strategies should too, ensuring that the financial foundation remains strong and supportive of the company’s overarching goals. In essence, by acknowledging and addressing accounting challenges head-on, rapidly growing companies can ensure that their financial infrastructure is not just responsive, but also a driving force behind their continued success.

Scale Up Your Accounting Process with OHI

So are you ready to upgrade and scale your accounting process with the best accounting outsourcing service provider for businesses? 

OHI is a specialized finance and accounting outsourcing service provider with over sixteen years of finance and accounting outsourcing experience. We have strong functional outsourcing expertise in end to end accounting processes covering daily accounting activities, reconciliations, month end and year-end account finalization processes, employee reimbursements, payroll processing, management reporting and financial analysis.

OHI serves close to 300+ clients across USA, UK and Canada. We invite you to experience finance and accounting outsourcing through us.

Learn More About Our Accounting Outsourcing Services – CONTACT US