4 Ways Centralizing Your Accounting Will Help Your Business
What is Centralization?
Centralization is the process in which activities and systems are localized in one area either a department or a team. In the terms of in-sourcing, centralization is letting a remote team handle your accounting processes.
- Accounting Processes Are More Consistent.
A centralized accounting staff handles payables and receivables for all locations. This results in processes being followed more consistently and efficiently, as a team in one location works together in a more coordinated effort.
Centralized accounting makes it easier to standardize procedures so you can fine-tune the accounting systems to close quickly. If a problem is found, it’s easier to research the issue, since the closing team has onsite access to the detailed transaction.
- Accounting Staff Is More Productive.
If you operate multiple locations, you may be sending multiple, separate payments to vendors, suppliers and service providers. Efforts are duplicated and additional time is needed to correct errors. Dealers save time and money by eliminating redundancies and increasing efficiencies.
With a centralized system, staff can look up accounts across multiple locations at the same time. For instance, if a manager needs to review the cash accounts, they can look up and see all the details in one screen, instead of having to perform multiple inquiries.
- It Improves Customer Relations.
Clients never want to wait so quickened processes cement efficiency and trust within the mind of the client. With centralized accounting, your group can send one invoice with charges from each location, which makes it more convenient and easier for the business to track their expenses.
- It saves Time and Money.
Time is money, then centralized accounting can save a lot of both. Monthly closings take days, so the more efficient the procedures are, the more you will save. With centralized accounting, staff can close multiple locations with a single process.
Without it, it is inevitable that some locations will be less efficient than others due to different policies, training, staff availability and management skills. Inevitably someone will be late in forwarding results to headquarters, which can delay the close.
According to research conducted by Ideal AP, companies that establish centralized accounts payable operations have a per-bill processing cost approximately $2 less than a decentralized system. Also, businesses with centralized accounting are more likely to use a form of online bill pay or electronic transfers, which expedites cash flow and greatly reduces mailing costs.
Auto groups still using decentralized accounting practices may want to consider the benefits of moving to a centralized process. A centralized accounting system streamlines many processes, improves productivity and saves time and money.
SupportCPA offers accounting teams that will help you scale and cut on costs such as money and time. We can help your business reach its potential.
SupportCPA is a leading Texas-based outsourcing company that provides virtual assistants and administrative support for businesses. Moreover, we provide both short and long term virtual outsourcing services customized to suit your business process needs.