Connecting Operations and Accounting: The Key to Clear Financial Insight

As businesses grow, operations and accounting teams don’t always have a clear understanding of each other’s needs and capabilities. This causes a disconnect between how the business operates and how their financials are structured to report the numbers.

The Disconnect Between Operations and Accounting

Operations is usually seen as a forward-looking, active role that drives the business, while accounting is often viewed as focused on recording and reviewing transactions that have already happened. While accounting does include this work, it also plays an important role in forward-looking operations through budgeting, forecasting, and projecting future results of operations.

For this to be accurate, both operations and accounting need to work together. The disconnect between operations and accounting teams also shows up in the systems businesses use. When operational workflows and accounting systems are disconnected, you usually end up with financial information that lacks context. The accounting system may show total income, but it won’t clearly show which projects, clients, or revenue streams are driving income.

If the accounting system is going to function properly and give a good overview of financial operations both teams need to give input. Without input from both teams, you create a system that has blind spots for needed financial information.

Then spreadsheets become necessary to plug the information gaps. While spreadsheets have their place in accounting, the accounting system should be used to its full potential to minimize the need for spreadsheets. Most companies use multiple systems to run operations, CRM’s, payment systems, project management and expense management apps.

Why System Integrations Matter

While most of these systems can connect and feed information to the accounting system, the systems are usually not connected, or the connection is not fully utilized. For example, a company using Stripe to process payments can connect Stripe to QuickBooks Online to upload transaction and payment details directly into QuickBooks daily.

When set up to its full potential, the transaction details will be mapped to the income and product categories in QuickBooks. The payments will be mapped to the bank account to reflect the deposits. In addition to running a general P&L report to find out the income and expenses associated with sales, you can also run a report to see which products or services are selling better.

These reports can even be automated to be emailed daily, weekly, or monthly. The operations team can make decisions quickly based on the speed of the reporting. Without these connections, the process becomes manual and time-consuming.

Reports are pulled from Stripe and QuickBooks separately, then combined in spreadsheets to make sense of the numbers. This takes time, increases the risk of errors, and often delays insight until it’s too late to act on. If your operations team needs specific insights to run the business, your accounting system and connected tools should be aligned to support those needs.

This is the approach taken at ProProject Bookkeeping, building accounting systems that are designed around the operational workflow of a business. Below are a few examples of how we translate operational needs to your accounting system.

What Your Accounting System Should Support

• If the company has project-based revenue,
  • Your accounting system should track income and expenses using projects,
    classes, or tags so each transaction is tied to a specific project or client.
• If you use multiple apps to run your business,
  • Your accounting system should have direct integrations or automated imports from those apps. Transactions should be mapped to the correct accounts, categories, and projects, and reviewed as new projects, clients, or products are added.
• If you can’t wait until month-end to understand performance,
  • Your accounting system should be updated weekly or in real time, with automated reports emailed on a daily, weekly, or bi-weekly basis to your team.
• If you sell multiple services and products,
  • Your accounting system should separate revenue using unique income accounts and product/service categories, allowing you to report on each clearly.
• If your team needs to understand what’s driving income and the cost of delivering work,
  • Your accounting system should break down amounts by project, client, or service so you can clearly see where money is coming from and where it’s being spent.

If it currently takes days or weeks to understand how the business is performing, the issue is systems. Pulling reports from different systems and rebuilding them in spreadsheets is a bottleneck that costs time and money. When operations and accounting teams are aligned, the accounting system is built around how your business operates. Financial reports are clear, timely, and ready to act on.

If your current setup isn’t delivering this, it may be time to rethink your accounting system with support from ProProject Bookkeeping.

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