“Sarah” stared at her screen in disbelief.
Within the last hour, she had received two separate emails from new starters at her company, worried that they had not been paid that month.
It was embarrassing. And she was so worried that they had got off to a terrible start.
So what went wrong?
Her first step was to pick up the phone to our team at Insight Associates, because we make their payroll payments. Had we somehow messed up?
Happily (for us), the answer was no. We were as efficient as ever processing payroll.
The issue, rather, lay with the company’s own HR department. When a new person joins the team, there is a form they are meant to send us, so that we know to add them to the payroll. But this time they simply forgot.
It’s actually not that uncommon – it happens more often than you’d think.
And there’s a lesson here for all companies, including yours.
If you’re a regular reader of my weekly emails, you will have heard me say that when your company reaches around £1 million in turnover, the way you manage your finances has to grow up.
You can no longer manage your money on the fly. The stakes are simply too high.
Plus, the volume of transactions and the complexity of your financial affairs will inevitably have grown since the early days of your company. Managing all this takes robust systems and processes that you may not have required a few years ago.
But here’s the thing…
The financial side of your business can’t be the only part of your business that professionalises.
All parts of your business really need to grow up together, in order to create a more profitable organisation that is ready for its next stage of growth.
The payroll incident shows why this is the case.
When we manage your finances, we don’t work in a silo. We depend on other parts of the business to give us excellent information – from payroll data to the number of widgets you’re making or sales for the past month – that we can feed into our systems. All this is processed, used to create accurate accounts, and then used as the basis for our analyses of your financial performance.
If the numbers we get from you are rubbish, our accounts and forecasts will be rubbish too…
It’s a case of garbage in, garbage out.
This doesn’t mean we won’t work with you if the rest of your organisation isn’t quite there yet. But it does mean that if you want to build a more financially disciplined company, it takes a change of mentality across the board.
You need to have a vision where your entire company is more professionally run, process-driven and efficient. And you need the will to make that happen!
Making that transition isn’t always easy, but it pays such enormous dividends. It seems self-evident to me that when your company is a well-oiled machine, it will be easier to scale and maximise your profit.
If you’re turning over more than £1 million, and are ready to make that transition for your company, why not give us a call on 01279 647 447 or email me right back.
We’ll take care of the finance department, ensuring that it runs to world-class standards. You can take care of your other departments. And together, we’ll make sure that you have all the financial insights, data, support and advice that you need to get to £5 million, £10 million – and beyond.
Warmly,
Garry
