Good Operational Accounting Explained

What is operational accounting? What should I look for when choosing an operational accountant? I have a chartered accountant, do I need an operational accountant too?

Good money management is one of the key areas where young and small businesses are often made or broken.

While many businesses use a chartered accountant for specific year-end functions and mandatory tax requirements, there is a significant amount of other ongoing process involved in keeping company finances in order, and making smarter financial decisions, throughout the year.

This is where operational accountants come in.

Operational accounting involves the day-to-day and week-by-week aspects of finance that keep your business running smoothly, and enable you to make more deliberate decisions towards your goals. This encompasses all of the systems and processes used to manage and track company financials ongoing (like debtors and creditors, cashflow, forecasting and reporting) and to efficiently sort those niggly essentials each month (e.g. invoicing, tax, payroll). An operational accountant can also assist you with strategic goals, managing growth and setting direction around finance.

So often, we see accounting functions in small businesses being loaded onto office staff who, while well-organised and capable, don’t have the crucial experience or the proper training required to really make the numbers sing, or draw insight from them.

Engaging an Operational Accountant – What to Look Out For:

Operational accounting is so much more than accurate data entry and superb organisational skills (though those are often part of the skill set too). Operational accountants should bring to the table a solid understanding of tax obligations and process as well as the systems and software involved in managing company finances. This is particularly important for staff and payroll finance, where rules are complex, strict and unforgiving when it comes to government compliance.

Your operational accountant should also have experience in ledger reconciliations, invoicing, how GST works and how/when to apply it correctly, plus at least five years of practical, local, accounting software experience, and the ability to conduct solid reporting on different financial data, from debtors, creditors and wages to robust managerial reports to drive the business etc.

Managing a company’s finances is a core function that requires a lot of trust. So when you choose an operational accountant, you want someone with whom you can easily build rapport and understanding. Ideally, if you really want to enable growth in your business, an operational accountant should understand your business goals and help you use the numbers to support those goals.

Knowing what you need is the first step in ensuring you have the right support in place. Consider things like the complexity of your business, your preferences and needs, like what level of reporting and advisory services you want, to match your ambitions (vs just someone to put the numbers in and take the pressure of you each month). Also if your staff need any training, plus options like whether you want somebody in your office at all times, or if someone part-time/offsite who can deliver when you need would work better.

If you’re not sure you’re getting the kind of operational accounting support you need to drive your business forward (or even just to meet year-end requirements for your CA), give us a call. We can help to define your goals, and assess and triage the support and systems you need to meet them.