The support you need behind the scenes to keep things running smoothly grows as your business expands is pivotal in successful scaling. If you can scale up properly, your existing systems and work processes should be able to cope seamlessly as your organisation grows. That’s not to say you’ll never need to recruit more people to work in the finance team as the wider business expands, but if you get your scalability right the amount of labour required within your team won’t need to increase at the same rate.
For example, doubling the size of the business shouldn’t mean that the finance team must do double the work. You should be able to increase your output without simply bringing in twice as many people, buying twice as many computers and moving into an office that is twice as big. Your existing operations should be able to cope easily with the demands of a growing business.
A strong finance department is crucial to your business' success. The objective is to remain informed and able to make smart financial decisions with reliable financial information that is readily accessible and robust. For example, poor financial information with errors can have an impact on the success of an investment, as incorrect financial reporting could cause delays in securing funds and missing out on further opportunities.
As your business grows, you are likely to outgrow your finance and accounting software several times. In the past, changing and implementing traditional software was a rigid and complex ordeal for the finance function. Today, the migration process has thankfully become more efficient thanks to powerful Cloud accounting software solutions.
Start with the basics
It might sound obvious, but you need to get the way you work right in the first place. It’s all very well being able to increase your output, but if that output is shoddy then you’ll simply be increasing your problems as the business grows.
Think of it like a car. If you use it only once a day, this means there’s plenty of spare capacity and it’s easy to scale up the number of journeys you make. But if that car breaks down on every journey, it doesn't matter how often you use it. It will still break down often and cause delays in reaching your destination in good time.
So, prior to assessing whether you can easily scale up your finance operations, check that your existing processes and systems are in good order.
Is the relationship between the finance team and the rest of the business a good one? Has your team fully bought into the ethos and goals of the wider organisation? Do you have the data, both internal and external, to be able to produce reports, accounts, budgets and forecasts accurately and clearly?
Without getting these things right to start with, having good scalability is pointless. You’ll just be doing the wrong things more often and on a wider basis.
Automating the finance functions
If you get your scalability right, you won’t just need to add more people to your department to cope with an expanding production line.
In fact, the whole point of scalability is that you do exactly the opposite. It is possible for production to increase, new customers to join and output to go up, but your systems and the way you work should mean that your existing team is well-positioned to take on the extra work.
The key to this is having the right technology at your fingertips.
A simple example in practice is your payroll function.
In years gone by, a wages clerk might have handed every employee an envelope with their money in it. There would be no shortcut for this labour-intensive task, and if the size of the workforce doubled, so would the number of envelopes that needed sorting out.
Eventually, if the business kept expanding, another wages clerk would need to be found, so the costs of operating the payroll team would increase.
And if work patterns at the business changed – for example, if there were 200 people working 20-hour weeks rather than 100 people working 40-hour weeks – the work of the payroll team would increase further even though workplace productivity wouldn't have changed.
Today, finance software means the payroll team can hit a button and everyone’s wage slips and payments are generated automatically. It doesn’t matter if there are 10 or 100 employees – the work for the finance team remains the same.
The same principle can be used across all your finance operations. Customer accounts, stock inventory, budget forecasts, ordering, payments to suppliers, employee expenses, pension contributions, employee share schemes, tax bills… all the things you do on a day-to-day basis can be automated as long as you have the right technology.
And this means that even if the number of transactions you are required to do increases significantly, your workload doesn’t have to. You won’t be bogged down with piles of transactional work that needs to be carried out manually.
How can Cloud software improve your scalability?
You can improve your business by implementing the right Cloud-based system for the finance function. In the long run, this will ensure that you and your finance team will be well-positioned to support the growth of the business on a larger scale.
As responsibilities and scalability increase, this naturally comes with learning new skills and figuring out productive ways to manage operations within the finance department. Cloud accounting solutions include additional services that can be bolted-on in the same way that programs can be installed on a computer or how apps can be downloaded onto your smartphone.
So, as you can see, one of the main benefits of financial management software is that it's easy to add new functionality to your system and automate manual processes to adapt to a constantly changing business environment.
Therefore, you won't be limited by your outdated legacy software, which is unable to meet these new business demands.
Our Cloud-based accounting software, Advanced Financials, is designed with exactly this sort of scenario in mind. It ensures you'll always have the right technology at hand, and you'll always be in a position to scale up with agility.