Let’s stop and think for a bit about the possible impacts of your bookkeeping and payroll operations on your team, both personally and professionally
Driven to distraction
In this article, we want to take a bit of pause and think specifically about your business’s operational staff, and the impact of the business finance function on their roles and goals.
It would be interesting to have a figure of how many hours a week each of your team members are spending unnecessarily on some sort of financial matter, rather than other priorities.
Such a figure would be difficult to nail down of course, with our thoughts and time regularly jumping from one thing to another, but perhaps the following areas may ring true.
How much attention are staff being required (intentionally or unintentionally) to give to the nuts and bolts of financial processing?
Or perhaps you’ve experienced a time when your processes have let you down and you find you or one of your team is scrambling to resolve a financial concern that’s become unnecessarily urgent?
While your team are supportive and kind and happy to help of course, what may be the long-term effect on your business when resources are regularly being diverted in this way?
An obvious consequence of this financial distraction can be less time spent in direct operations (like sales and client relationships). Here we are meaning that a team member’s time is being taken up in a way that was not envisaged as a part of their role. And for the team member themselves, it may seem easier to allow that time diversion rather than to spend even more energy seeking to bring about a change, and so the problem remains.
Along with time, there’s also a diversion of headspace to consider. Particularly if there are ongoing (but avoidable) financial processing issues month after month, it can be a case of significant distraction becoming normalised, making a lesser input to other operations the standard. And when financial issues from the workplace flow further into frustrations on the personal front, they can get buried deeper and have widening effects.
So, the time you are taking now to review the financial functions in your business can be seen as a well-invested use of your attention. The flow-on effects to your team could be significant.
Operational budgets
How much time is in your business is being lost in the uncertainty of operational budgets?
While your big-picture annual budgeting may be great, where things can fall down is translating this into helpful month-by-month information for teams and leaders.
For example, what process and how much time do team members have to spend to understand: what budget is available to them; how they go about accessing the funds; how much of the funds are left and can still be spent; and when additional approvals are needed.
Uncertainties like this may not be voiced, but they can be affecting the team.
If one or more of the team are not aware of their relevant budgets and how they are tracking, there is an increased potential for under-resourcing or over-resourcing specific operational areas. In practice, this means that important spending could be delayed or missed because the right people weren’t aware of the available budgeted funds. On the other hand (for the same reason), on-the-fly decisions may be made, which result in an unintended overspend in another area. The resulting confusion, apart from the financial challenges, can involve the team in significant distractions.
Can you picture how helpful it would be to look at your financial reports and immediately see with clarity how each of the figures relates to the real-life operations of your business? Getting reporting to this level is an important early step to significantly reducing financial distraction.
Here’s how it works.
Your “accounting” or “chart of accounts” is structured in a certain way, generally defaulting to some set of standard categories and groups. However, the groups or departments or operational areas of your business may be set up quite differently and bear little resemblance to what is coming out of your accounting software.
This disparity can lead to a convoluted and manual process of trying to work out how the numbers in the accounts actually relate to functional areas. And by the time this process is done, if ever, the opportunity to have the finances contributing to operations has been reduced or missed.
But by structuring financial reporting in a way that is meaningful to the team and that intuitively relates to their business thinking, a good amount of this disparity can be removed. The result can be more easily understood finances that relate more to real life operations. The team can spend less time trying to collate, understand and interpret the figures, and more time being helped by the figures.
Layered on to a financial structure that meaningfully serves the team, a good budgeting process adds a turbo charge. Not only can leaders see figures that are meaningful to them, but it can become much clearer how excess (or lack of) funds are immediately affecting their operational areas.
This allows for less time and headspace in trying to understand the situation, and more time and headspace into real-time responses, changes and plans.
Personal impact
The impact of business finances on your team isn’t necessarily restricted to work-related concerns. Like all of us, our teams have personal budgets and financial planning and may be regularly juggling income and expenses at the family level. And as with any employment, when information about pay is not clear and timely, it can have an immediate personal impact.
This can be the case particularly when staff are struggling to understand the complexity of how their employment package works, and components that may affect their reporting to other bodies like Centrelink and the ATO.
So, it can be really beneficial to ensure that:
- details of employee remuneration are documented and communicated clearly at commencement
- employee remuneration is updated, processed and delivered in a good timeframe each pay cycle
- employees have access to additional information they may need from time to time for banks or real-estate agents or the like
Having your payroll streamlined, accurate and well-understood can be a great help. This could mean identifying the appropriate support to ensure the payroll and benefits are structured correctly, reflect the employment agreement, are compliant with external bodies, and are communicated and understood effectively by all involved.
Would you like to explore further topics related to bookkeeping and payroll in your business or organisation? eBook available now: