Talking Cents

Financial processes often develop gradually as a business grows. A procedure that worked well when transaction volumes were lower and fewer people were involved may become increasingly difficult to manage as operations expand. 

The problem is that inefficient accounting workflows are not always immediately obvious. Employees may simply spend more time completing routine tasks, reporting may take longer or small workarounds may become accepted as part of the normal process. 

Recognising the early signs of inefficiency can help businesses review their financial processes before unnecessary administration begins affecting reporting quality and day-to-day operations. 

Financial tasks are taking longer than they used to 

One of the clearest signs of an inefficient process is when routine accounting tasks consistently require more time. 

Processing invoices, reconciling accounts, preparing reports or locating supporting documents may have once been relatively straightforward. As transaction volumes increase, the same processes can become slower if they have not been adjusted to reflect the changing business. 

Occasional delays are normal. Consistent delays, however, may indicate that the underlying workflow requires attention. 

Reviewing where time is being spent can help identify unnecessary steps, unclear responsibilities or processes that no longer suit the size of the business. 

The same information is being entered more than once 

Repeated data entry is another common source of inefficiency. 

Employees may find themselves entering the same information into different spreadsheets, accounting platforms or internal systems. Apart from taking additional time, duplicate data entry can increase the possibility of inconsistencies between records. 

A business should understand why information is being entered multiple times and whether those steps remain necessary. 

In some cases, improved processes or better use of existing financial systems may reduce duplication without requiring a complete change in accounting software. 

Approvals regularly create bottlenecks 

Approvals are an important financial control, but poorly structured approval processes can slow down everyday accounting. 

Invoices or expenses may sit unresolved because it is unclear who needs to approve them. Employees may need to repeatedly follow up with managers, or relatively straightforward transactions may pass through more approval stages than necessary. 

Signs of an approval bottleneck can include: 

The objective should not be to remove appropriate controls. Instead, approval procedures should provide oversight without creating unnecessary delays. 

Reporting takes too much manual preparation 

Financial reports should provide useful information about business performance, but the process of preparing them can reveal problems within the wider accounting workflow. 

If employees need to spend significant time collecting information from different systems, correcting classifications or updating spreadsheets before reports can be produced, the reporting process may be more complicated than necessary. 

This can also delay access to financial information. 

Reviewing the steps required to prepare reports can help determine whether the issue sits with reporting itself or with the processes used to record and organise information throughout the month. 

Employees rely heavily on workarounds 

Workarounds often develop when existing processes no longer meet operational needs. 

An employee might create a separate spreadsheet because the usual system does not provide the information they need. Documents may be stored outside the normal process because they are difficult to locate later. Staff may also develop their own methods for completing tasks because no clear procedure exists. 

Individual workarounds can appear harmless, but over time they can create inconsistent financial processes. 

If multiple employees have developed their own solutions to the same problem, it may be time to review the underlying workflow rather than continuing to rely on temporary fixes. 

Financial information is frequently delayed 

Another warning sign is when financial information is consistently unavailable when it is needed. 

Reporting delays can result from several smaller inefficiencies throughout the accounting process. Missing documentation, outstanding approvals, unreconciled accounts or inconsistent transaction recording can all prevent financial information from being finalised promptly. 

These delays can reduce the usefulness of financial reports because business owners may be reviewing information that no longer reflects the most recent activity. 

Improving the processes behind the reports can help financial information remain more current and useful. 

Small inefficiencies can become larger as a business grows 

A process that wastes a few minutes when completed occasionally can become a significant administrative burden when repeated hundreds of times. 

This is why growing businesses should periodically review how financial tasks are completed rather than assuming existing processes will continue to scale effectively. 

A review may identify opportunities to clarify responsibilities, remove unnecessary duplication, improve document management or make better use of accounting technology. 

The goal is not to change processes simply for the sake of change. It is to ensure financial administration remains practical, reliable and appropriate for the way the business currently operates. 

Create Financial Processes That Keep Up With Your Business 

Inefficient accounting workflows often develop gradually, which can make them easy to overlook. Repeated data entry, slow approvals, manual reporting and frequent workarounds can all indicate that existing financial processes are no longer operating as effectively as they should. 

Recognising these signs early gives businesses an opportunity to review their processes and make practical improvements before inefficiencies become more difficult to manage. 

If your financial processes are becoming time-consuming or difficult to manage, contact MAS Partners. Our team provides accounting, business services and compliance support to help Australian businesses establish more organised, efficient and reliable financial processes.