There are a number of descriptions of the administrative function but quite often it is the oil that keeps a business ticking over efficiently. Without a workable administrative system amazing things can happen in a business.
Recently I heard of a new accountant rummaging around in his new role to discover a shoe box of pre Euro European currency notes totaling £300 in value but no longer legal tender. Another story was about the directors' 288 returns (8 of them) sitting neatly in a file – but not sent into Companies House over the past two years.
Some of the usual problems have to do with lost papers, lost vat returns, Inland Revenue dates missed and general muddle. What is worse is to discover that work has not been invoiced or records about jobs are lost or inaccurate.
There is many an MD who is well aware that administration is not his strong point and he will quickly get someone to help him. The essential skills of that administrative support person is an ability to multi task, to keep records straight, to be able to find essential bits of paper immediately and to keep the MD informed of any potential untoward happening while allowing him to get on with the essential business of the organisation. But, of course, there is much more to the administrative function than this.
There are a number of areas that loosely fit under administration, especially in a small company. This may include:-
Insurances. Most companies will have office and contents insurance, employer and public liability insurance. There are also special insurance policies to cover company cars, professional indemnity insurance and other key man insurance policies.
Pensions. All companies where there are more that 7 employees should be offering a pension to employees. These are usually Stakeholder pensions and can include pension contributions by the company to employee's pension plans. Pension control sits loosely between the HR function, the payroll and the accountant – but whoever looks after the pension, the detail is important.
Health and Safety. Any company with over 6 employees should have a health and safety policy in place, and this includes having first aid available for employees. Keep in mind that, should there be a claim, the MD is the person who would be prosecuted.
Facilities Administration. In small companies, to have an inhouse IT support function is not usually one of the priorities, although it is essential for the smooth and efficient working of the office and someone will need to attend to computers, e-mail problems, printer malfunction and the like. Similarly the functioning of the telephones, alarms and security all fall under administration. Likewise, the ordering of essential supplies is vital to the efficiency of the business.
Accounting. A number of small companies will outsource the accounting function but even when this happens there are finance related functions in the office which need to controlled. One of the essentials is to have an easily visible record of cash in and cash out so that there is an at a glance view of current liquidity. Excel is a flexible vehicle for having these controls in place and easily managed. But some accounting software is very reasonably priced and user friendly and worthwhile investing in while the business is young.
Payroll. Payroll has become a complicated business. The Inland Revenue regularly introduces new legislation which no doubt helps the employees but complicates the payroll process month by month. Most companies will outsource the payroll function but if it is kept in house it needs to be run by a competent trained person using software that is compliant with the Inland Revenue criteria.
There are so many more areas that will fall to an efficient administrator in a small business, areas that will, in the organic growth of the business be eventually hived off to an inhouse accountant, an HR manager, an IT consultant or a facilities manager. In the meanwhile those efficient administrators are like gold dust, so please give them the value they deserve.
Paul Green, FInstIBI - Director | Thames Valley Business Advisors Limited | (e) paul.green@tvba.co.uk | (w) http://www.tvba.co.uk | |
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