Accounting is an integral part of all enterprises. It is important for record-keeping, monitoring your business expenses, achieving the company’s financial goals, and discovering new avenues of growth. However, different enterprise sizes require different accounting processes. The same accounting process doesn’t fit all sizes. When you look at the internal accounting system of a small business it may look completely different from any medium or large size enterprise.
Small businesses are in the phase of establishing their financial system, therefore their financial processes will highlight important aspects. The main focus of SMEs is to implement an effective financial process that is accurate for their business. On the other hand, large businesses are more established. They have a large number of employees all their financial processes are systematically arrange.
An evident difference between SMEs and large business activities is with the number of employees working, their salaries, transaction volumes, and maintenance of all transactional records. SMEs’ have a fewer number of employees, a fewer number of clients initially which means they have a low volume of transactional data. This makes the recording and bookkeeping process much easier and less complex. Records of SMEs are easily manageable on paper as well as on accounting software. SMEs’ accounting can be managed with or without accounting professionals. But with the assistance of professional accountants, a strong financial framework can be built according to professional accounting standards.
On the contrary, large businesses have a large number of clients which means the plethora of transactional data, managing business expenses, paying a large number of employees on time, can be a lot more complex. As the business grows, the invoices and records keep on increasing. Therefore the record-keeping process should be systematic and accurate. For large businesses, manual record-keeping is very difficult to maintain, they rely on cloud software. Large businesses have professional accountants who are responsible for managing the company’s all accounting activities, identifying financial risks, and suggesting improvements in the financial system. Professional accountants take over the complexities of accounting holistically and solve all the challenges with their skills and knowledge.
The approach “one size for all” does not work realistically. You need to make sure that your professional manager develops a system which is suitable according to your business size. Implementation of the correct system will have effective benefits on your business and will help accelerate your business performance.
