ADVISORY HIGHLIGHT
Monthly Accounting Practices to Implement Now as You Scale Your Business
In today’ s fast-paced business environment, efficiently managing your financial operations is critical for success. As many growing businesses struggle to keep up with the complexities of in-house accounting, our outsourced accounting pros make it possible to position your business for increased growth.
Here are some key monthly accounting practices that businesses should implement during the scaling process:
Leverage Technology to Streamline Accounting Systems
Technology is at the forefront of scalable finance practices. It can enhance your accounting systems by automating processes, improving accuracy and providing real-time data.
In industries like construction, hospitality and health care, having a front-end system that integrates smoothly with the accounting system is vital.
Whether you’ re in the restaurant industry using a point-of-sale system to track sales and inventory or a construction company using a project management tool, these systems can tie into your accounting system providing essential data.
When it comes to automating your accounting practices, this can be an invaluable ticket to saving time and money. From accounts payable to expense reporting, today we have the technology to ensure you are taking advantage of early payment discounts, catching unpaid invoices and much more without the need for a watchful eye.
The use and integration of these key systems eliminates the need for double data entry, reduces the risk of errors and improves the accuracy of financial data, enabling better financial insights.
Building Your Cash Reserve
One of the most critical aspects of maintaining a healthy business positioned for growth, is having a robust cash reserve. Whether you’ re a small startup or an established enterprise, having funds available for unexpected expenses or investment opportunities is essential.
On average, businesses should maintain a cash reserve equal to 10 % to 30 % of their rolling 12-month revenue or three to six months of operating expenses. This reserve ensures that your business has the financial cushion to weather periods of slow revenue and economic dips or unexpected expenses, providing a safety net that can protect the company from financial instability.
Businesses should start small and gradually increase their cash reserves. By consistently building up savings, businesses will gain financial security and the flexibility to reinvest in new growth opportunities when they arise.
Keeping Your Numbers Up to Date
To make informed business decisions geared toward growth, accurate and up-to-date financial data must be a top priority. This is best accomplished by ensuring key metrics and reports are updated regularly. Some best practices for keeping financial data up to date include performing regular cash flow reconciliations and staying on top of book entries.
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