Consulting Services • Published 4/23/2021 Growing Pains: Common Challenges that Accompany Business Growth

As we set out on the long path to economic recovery, opportunities are already on the horizon. Business decision makers must now assess whether they are positioned for thoughtful growth and sustained success. Whether you are growing from a small to medium-sized organization or from a medium to large-sized organization, is your accounting and financial infrastructure prepared to handle growth, and the opportunities and challenges that come along with it?

Three common pain points crop up among growing businesses and organizations: lack of accounting and financial staff, lack of technology, and lack of resources to update existing processes or implement new processes. When forming a growth strategy, key decision-makers should assess whether these challenges currently exist in the organization:

1) People: Accounting and financial staff

Who has a hand in the day-to-day accounting and finance operations? Are items falling through the cracks? Is the organization too focused on tasks rather than strategy? Have you missed out on opportunities (loans, grants, expansion, etc.) because the organization doesn’t have the resources or the depth of experience needed to execute?

Oftentimes, a business grows faster than its existing accounting department can bear, creating the potential for missed opportunity and reduced company morale by spreading your team too thin.

2) Processes: Resources to implement change

As businesses experience growth, change is inevitable and essential. Having the people, processes, and resources in place to implement change is essential to success. Do you currently have the team and the necessary resources to facilitate change and proactively evolve your business? Change and evolution are hard, but essential to growth. Without either, a business runs the risk of falling behind.

3) Technology: Software and automation

Is a lack of technology and automation preventing your business from growing and taking on new challenges? Is it hindering your ability to remain agile and pivot your operations when the need arises? Do you have an inordinate amount of manual processes or a lack of visibility into real-time data? Manipulating data by hand wastes time and increases the risk of human errors, which leads to greater organizational issues and erodes trust in the accounting and finance function. 

Investing in operations

Day-to-day accounting and finance tasks should not pull business owners or organizational leaders from the strategy and decision making that is critical for success. Rather, these tasks should be positioned to support strategy and decision making. Timely reporting is integral to making agile business decisions. It may be possible to manage the accounting and finance functions with minimal resources and an all-hands-on-deck approach as a small business but, as growth accelerates, there will come a time when that’s no longer feasible or functional.

Watch carefully for early warning signs that your organization is outgrowing existing operations resources.

Watch carefully for early warning signs that your organization is outgrowing existing operations resources. When your accounting and finance team is stretched too thin, it will likely become very difficult to close the books on time. Crucial financial information may be reviewed too late to make impactful change. Automating manual processes and implementing technology that streamlines your existing operations may require making an investment in your accounting and finance infrastructure. 

Outsourcing accounting tasks or partnering with an advisor for process selection and implementation can be an opportunity to bridge several of these gaps, and the approach can be customized for your organization’s specific needs. Whether a business is lacking a CFO, controller, financial analyst, or staff accountant—or simply needs to augment the existing team—outsourcing all or part of your accounting and finance function can allow in-house professionals to focus on core business tasks and provides scalability to help mitigate some of the risks associated with rapid growth.

Partnering with a professional services firm is often more cost-effective and agile than hiring in-house staff. By outsourcing, your business can save the typical attributed carrying costs associated with bringing on additional staff, such as payroll taxes, insurance, paid time off, paid leave, and retirement. It also alleviates some of the stress that comes with training and turnover and provides the ability to downsize or upsize capacity at any time, based on changing business needs.

Furthermore, the right partnership can give you access to a firm that has broad experience with functions other than accounting, such as tax, assurance, change management, cybersecurity, technology and more.

Supporting long-term growth

As organizations grow, there are inevitably growing pains. A strategic partnership can help alleviate these pains and build the foundation that is necessary for future success. 

P&N’s experienced and diverse professionals understand the ongoing, day-to-day needs of a growing business. Our goal is to help clients align business needs and goals to successfully manage your people, processes, and systems. A business assessment can help a growing company understand the current state of the business and provide unbiased analysis on the risk and potential opportunity for investing in growth. This information is valuable when determining what resources and processes should be in place and identifying a strategic path forward that aligns with your desired outcome and growth opportunities.

If you find that your organization is falling behind on technology and automation, or lacks sufficient staff resources to adapt for growth, P&N can help assess your business needs and risks. Contact us to start a discussion.