3 ways of doing accounting: Which one suits your business?

Accounting | 11.04.2019

by Andreas Kirsebom

There are many possible accounting solutions to choose from, depending on the size of your company, the nature of the business and a whole range of other factors. But how do you know where to find the perfect fit for your business?

In this piece, I set out to describe 3 very real and typical scenarios portraying the financial function in businesses and the ways of doing accounting. I use 3 fictional companies facing different challenges and different needs, and present concrete suggestions for solutions.

Hopefully, some of the insights here will guide you in the lookout for an accounting solution that really meets the needs of your company.

The A Company: Introduction

The A Company is a mid-sized provider of electrical supplies and installation services and has 180 employees, with an annual revenue of NOK 195M. Employees are divided into departments which respectively handle products, sales and on-site installation services, each with its own departmental chief. The newly employed CFO wants to implement new processes for project control and purchase acquisitions, as well as KPI’s for measuring employee profitability.


The A Company currently has an in-house financial team that handles all accounting and financial related processes and they also administer all purchase agreements with vendors. Handling invoices from vendors is quite time consuming as it is done manually by the finance team and approval is hard to obtain as it includes all levels of the organization. Furthermore it is hard to align project KPI’s (margin, gross profit, staff contribution and so on) across cost- and revenue streams and staffing costs. The A Company is struggling to find the right fit for the finance function and their organizational needs. Furthermore, poor accounting and financial processes has resulted in low project margins and the newly employed CFO struggles to obtain the answers as to why this has happened.


In order to meet the needs of the CFO, a broader perspective to the accounting and finance function should be adopted. The A Company should implement a web based portal that can handle administration of ingoing invoices, creating invoices for customers and that provides market leading reporting and analysis tools. In the A Company, the value creation is done by providing electrical supplies and installation services to customers.

The CFO should look at outsourcing the accounting process and focus the internal finance and accounting team on controlling and reporting tasks. In order to get efficiency gains in invoice handling, a web based portal should be implemented. Such a portal would fully cover the needs of the A Company and give the CFO access to bespoke reports for project profitability that include the desired KPI’s, and the invoice application ensures efficient handling and approval of all incoming invoices in a shared common view, as well as easy creation of customer invoices.

As companies search for the perfect accounting partner to meet their needs, there are some important reminders that are generic. All companies can benefit from the advantages associated with employing modern and digital tools throughout their financial and accounting processes. The journey from manual and time consuming processes to an automatic, dynamic and timely finance and accounting process will vary from company to company. Experience shows that the more stringent one manages to motivate and incentivize adherence to new routines and systems the faster one can reap the benefits.

The B Company: Introduction

The B Company is a relatively small provider of cleaning services to other businesses with an annual revenue of NOK 10M. It has 8 employees and the founding Manager divides his time on administrative tasks, sales and operational duties. The employees provide cleaning services across several sites, and in some of the larger building complexes there are even several individual clients. 


Whilst staff turnover is low and customer satisfaction is high, the Manager struggles to make time for all tasks. Furthermore, there is a long waiting list of customers who wants to enter into an agreement with the B Company, but the Manager looks at increasing the operations with horror as time already is scarce. A while back, the B Company implemented a cloud based accounting portal to get access to modern tools and enable a more efficient handling of their accounting tasks. Despite this/Nonetheless the Manager struggles with creating invoices and efficient handling of settlements from customers. This especially as when the employees are out cleaning in the larger business complexes supplies are merely written down on paper by hand. Then the Manager gets a scan sent by email monthly denoting supplies used by employee for each customer. The Manager aims to create better routines for aligning customer costs and settlement. 

The B Company has taken some steps on their own to modernize their accounting tasks, but the Manager is finding it hard to identify further steps to take in order to cut time spent on invoicing and customer settlements – as well as meeting the needs of future and potential customers.


The B Company should look at data collection in terms of cost for supplies per customer and consider setting up a file transfer agreement with their bank. For the supplies used by employees an analysis could be done to include the cost as a factor of hours spent cleaning for each customer. In terms of efficient invoicing of customers the adoption of a factor for supply cost, a variable element for staff hours will enable a more efficient process. For settlement and matching incoming payments from customers this can be handled by a new bank agreement which can enable the distribution and receipt of bank files which cite the invoices that the customer has paid.

The C Company: Introduction

The C Company is a market leading provider of consultancy services for the public sector, with services ranging from management consultancy and strategy to media and market advisory. There are more than 500 employees and annual turnover is approximately NOK 950M, and most of the assignments and customer projects tend to last from 10 – 18 months.


The CEO is highly professional and has a modern approach to leadership of the high competent workforce and continuously seeks to modernize and automate internal processes. The C company has outsourced its accounting and finance processes to a professional partner. Working with a professional partner and establishing shared responsibilities and routines has been time consuming and some of the intended gains from the co-operation has not been realised.

Although the C Company has already outsourced its accounting and financial processes, some issues remain in terms of data being entered manually between internal systems, lack of data transfer from internal systems to accounting and mixed responsibilities for the month end reporting.As such the C Company and the CEO is looking to identify the key benefits and savings from the outsourcing process as well as identify future prime areas of improvement.


There are to obvious opportunities for the C Company in this case.

1: The C Company sends a meeting request for an evaluation with their existing outsourcing partner, in which all their challenges are discussed openly. After that, the C Company should expect their professional partner to return with specific suggestions for solutions and how they can meet the needs of the C Company to a larger extent. If the C Company should choose to continue their cooperation, a series of follow-up meetings should be booked within the first period of time.   

2: The C Company contacts 1-3 other potential business partners specializing within accounting and finance. Perhaps the most important aspect of this would be to create a detailed specification of all their requirements, considering all their challenges from their cooperation with the former supplier. Clarifying expectations and creating a completely unambiguous agreement concerning tasks and the distribution of responsibilities is essential to establish a successful partnership. 

So: Which one are you?

Not every scenario fits every business. You need to find your perfect fit, depending on who you are. However: every company out there, including yours, should focus on becoming more efficient and seriously consider modernizing their financial function. There is just so much to save and so much to gain.

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About Andreas Kirsebom