The role of finance and accounting teams is changing rapidly as businesses rely on timely financial insights to prepare for the future. This means accounting teams need to grow and mature, and growing pains are inevitable.
Outdated processes and tools often hold accounting teams back, bogging them down with manual work that gets in the way of strategic growth. If you don’t audit your processes and tools, you can end up scaling inefficiencies that lead to costly errors and compliance headaches.
If your accounting function still relies heavily on spreadsheets, manual reconciliations, and fragmented systems, it’s time to consider a more strategic approach.
Let’s walk through the key stages of accounting maturity, common scaling challenges, and practical steps to set your accounting team up for success.
For a deeper dive into the topic, watch our Netgain Accounting Summit session on growing your accounting function.
The stages of accounting maturity
Building a future-ready accounting function starts with understanding where you stand today and how to get to the next stage. The journey follows four stages:
Stage 1: Accounting teams at this stage rely on cash-basis or incomplete accrual methods, with unstructured processes and minimal focus on compliance. They primarily use spreadsheets and basic software, leading to high risk of error and limited forecasting capabilities.
Stage 2: At this stage, processes start to take shape, with some standardization and the adoption of basic systems like QuickBooks. However, reliance on manual work remains high, and compliance is often inconsistent. Data is still fragmented, requiring manual aggregation for analysis.
Stage 3: At this stage, accounting teams have adopted a robust enterprise resource planning (ERP) system and clearly defined processes. They produce financials that comply with Generally Accepted Accounting Principles (GAAP) and leverage automation tools for some reconciliations and close processes, though manual checks are still common.
Stage 4: Mature accounting functions have fully optimized processes centralized in their ERP. They use automation and AI, predictive analytics, and standardized workflows. These teams are ready for IPO-level compliance and can produce audit-ready data at a moment’s notice.
To assess your current level and learn how to get to the next stage, download our free e-Book Modern accounting maturity model: Your flight map to growth.
Common challenges when scaling an accounting function
You may be tempted to start scaling your accounting team by adding headcount. But the process should begin with understanding your processes and technology—along with their limitations—so you can create a plan to transform them to handle greater complexity.
As you begin, here are some of the biggest hurdles you may uncover.
What got you here may not get you there
The problem: Applying current processes to a growing team and business can set you up for failure. You may end up carrying over inefficient workflows that will slow you down as you grow.
For example, manually entering data and reconciling accounts is time consuming and error prone. This leads to slow month-end closes and inconsistent financial data. And this is not a process you want to scale as is.
The solution: Map the process first and find out where bottlenecks and inefficiencies are getting in the way. Then, explore the improvements you can make to remove those obstacles, like automating manual tasks.
Automating high-impact processes like bank reconciliations, close procedures, and invoice processing can drastically reduce manual intervention, making it easier to scale.
Fragmented data limits visibility
The problem: Without a single source of truth for financial data, teams struggle to get a clear picture of the business’ financial health. As you add new solutions to your tech stack, you can end up with disjointed data. And data silos slow down decision-making and increase the risk of errors.
The solution: Centralizing financial data in a single place, giving leadership the insight they need without spreadsheet gymnastics.
You can achieve this by adopting accounting solutions that are built directly in your ERP, creating a single source of truth and getting rid of version history issues and constant switching between platforms.
Compliance gaps lead to audit struggles
The problem: Business growth requires greater financial controls and often brings increased compliance scrutiny.
If you’ve been getting by with informal controls and manual approvals, you may struggle to keep up with a larger team, stricter requirements, and increased audit expectations.
The solution: Ensure that any accounting solutions you adopt help to automate controls and approval workflows and create automatic audit trails. This will reduce risk, support compliance, and scale effortlessly as your team grows.
For more tips on how to overcome these challenges and real-world examples, watch the full session on growing your accounting function from the Netgain Accounting Summit.
Strategies to drive successful accounting transformation
Now that you understand the obstacles you may face when scaling your accounting team, let’s explore strategies for successful growth.
1. Automate the most time-consuming tasks
Automation is the most effective strategy to free your team from time-consuming tasks and begin their transformation into strategic advisors.
Start by focusing on high-impact areas like the close process, bank reconciliations, and accounts payable. This will allow you to remove manual processing and calculations, reducing the risk of error and freeing up time for analysis.
Implementing automation solutions will also give you the chance to step back, consider your processes as a whole, and identify areas for increased efficiency.
2. Prioritize data accuracy and visibility
Many companies still rely on a patchwork of disconnected systems and spreadsheets. This means that reporting is often delayed and only provides retrospective insights. Unifying your data will help your team provide real-time, proactive insights.
Transitioning to a unified ERP enables data to flow seamlessly across functions. And centralized data leads to improved accuracy and a single source of truth.
Additionally, real-time reporting gives decision-makers immediate access to up-to-date performance data, like cash flow analysis. This gives leaders the agility to make timely decisions and quickly pivot strategies as needed.
To scale effectively, build a connected tech stack with accounting solutions built directly into your ERP, eliminating data silos and supporting real-time decision-making.
3. Adopt a continuous improvement mindset
Scaling isn’t a one-time project. A successful strategy requires you to continuously refine processes and technology to keep pace with business growth. You can achieve this by:
- Selecting one process or pain point to focus on improving each month.
- Scheduling time each month to review how the past month went. Invite your team to provide feedback to gain insight into the process and any bottlenecks.
- Applying successful strategies to other processes that can be improved. Did automating bank reconciliations save your team time? Consider automating the lease management process next.
With small, incremental improvements, you’ll see your processes become more efficient over time, shaving days or even weeks off what used to be the most time-consuming tasks.
Setting your accounting function on the right path
Preparing your accounting function to meet the challenges and opportunities of the future requires thoughtful planning, but it pays off.
For example, the Pura accounting team modernized their month-end close process with Netgain’s automation solutions, and this allowed them to cut their close time from 15 days to 7 days. They achieved this by improving visibility into the process and automating manual tasks like amortization journal entries.
As the team continues to monitor and improve the process, their goal is to achieve a 5-day close by the end of the year. This gives them more time to focus on strategic projects that support business goals.
This example shows that growth and improvement is possible with thoughtful automation and data-driven decision making. With the right tech stack in place, you can build an accounting team that drives strategic growth and ensures long-term financial stability.
Discover more in-depth strategies to prepare your accounting team for the future of finance with our expert-led sessions from Netgain Accounting Summit.
