Do You Have What It Takes to Lead An Accounting Team?

Are you a local business executive and wonder what you are supposed to be doing to manage the accounting team? Perhaps you have hit bumps in the road managing and developing employees or have been afffected by turnover. You may be questioning to what degree you can handle managing a function outside your technical lane. These are all great questions, stick around.

Back Office Roadbumps

This group we know started small in landscaping and bootstrapped a successful tree care division during the boom times. As each division grew, investments led them into general construction work, and now they are building an engineering and consulting side of the business and owns properties all over town. Well run blue collar businesses will compound like that.

Some folks have the midas touch, which is not to minimize hard work and talent. They have sales and service delivery down to a science and follows their own version of lean. Financially, the business is healthy, good balance sheet and cash flow, but some cracks started forming in month close and eventually some questions about the tax returns.

Ridgeline was called in at a refinancing event, when the lender reporting needed multi entity consolidated financials (sophisticated financial segmentation by divisions). This type of project work is a common entry point for our managed accounting services.

What was not common was the amount of forensic work that ultimately went into this engagement.

The group had a competent bookkeeper, Jim, on staff and local CPA aligned with Jim for approximately three decades. Jim retired one day and moved to Key West. Jim was keeping good books for three deacdes, until he wasn't anymore. The three years that followed were a patchwork of a couple bookkeepers that didn't stick and a failed attempt to hire a Controller to match the growing needs of the business.

The local tax CPA remained engaged all the same, but the accounting function was actively falling apart. Ownership thought in hindsight the tax CPA had an eye on current events. Not true. Tax was seeing them on a 6 month tape delay. Common role confusion there. All the tax CPA could really do anyway was to make fairly hollow recommendations from afar. That role is too far removed from day to day financial operations to be a significant part of the accounting governance function. That was one blindside, it happens. Not the whole story.

So what fell apart? A bad hiring run? A sudden shift in business practices? No, something much simpler.

The deliverables throughout those 30 years were delivered on schedule and accurately, but underneath, the supporting system was thin and the infrastructure was crumbling. No written operating procedures. No documentation to spell out why decisions were made. There were approval workflows, but they only lived in Jim's head. Those all went to Key West with Jim, and the vaccum that followed was doomed to fail from the start.

All this in a business running a remarkably efficient lean system to deliver to customers, but no system to run the financial engine of the business. Not good, but entirely commonplace in small business.

The employees brought in to replace the person were doomed to fail from the start.

"But we thought that bookkeeping was a commodity service and that these people would be able to pick up right where Jim left off". Many expensive cleanup hours later, we arrived at that breakdown over a beer. The leadership group thought bookkeeping and accounting were plug and play functions, that they could pull any credentialed and experienced person off the street and replace what they had. Not the case.

Accounting staff needs structure, systems, and good leadership too.

Understanding the Roles of a Finance and Accounting Staff

An accounting function is a tiered stack of jobs, arranged generally by how much judgment each requires.

At the base is clerical and transactional work: entering bills, cutting checks, sending invoices, chasing receivables, running payroll, importing bank feeds. High volume, low judgment.

Above that is the accounting work proper: journal entries, accruals, reconciliations, and reporting. Month/Quarter/Year close is the ritual that ties it all out and brings it together, a sort of backoffice symphony.

Above the close sits review: a second set of eyes that checks the work before it leaves the building, approves the journal entries, tests the reconciliations, and catches the error while it is still cheap to fix.

At the top is governance: owning the assertions behind the statements, setting the control environment, deciding how things get done and why, and carrying the relationship with lenders, auditors, and the tax preparer. Governance is the leadership seat.

Judgement sits at all layers, but consequences of judgement generally rise, and the world becomes more ambiguous, as we ascend.

In a company large enough to afford it, these are different people. An AP clerk and an AR clerk at the base. Staff accountants above them. A senior accountant or accounting manager running the close. An assistant controller reviewing. A controller owning governance, with a CFO on top for strategy. The separation is the point. The person who cuts the check does not approve it, and the person who does the work does not review it, because the org chart builds those checks in by design.

Now compress that chart into a one or two person department, which is where most owner-led companies actually live. One bookkeeper handles clerical, accounting, and close. Review and governance have nowhere to go. They fall to the owner, who probably has limited techincal accounting training, or they get assumed to other parties. More often they simply go unfilled, invisibly, because the statements still come out looking fine.

Our contractor sat in this zone for thirty years and never saw the blind spots. Jim had it covered, which is impressive, but also a significant risk. Jim had some clerical help, but that was thin. The office ran steady because he was good, and it ran on borrowed time the whole way because he never stopped what he was doing to document it for the next person. When he left, the owners thought they had lost a replaceable machine. They were wrong.

Map your own department against the full stack. If the top two seats, review and governance, are empty or quietly assigned to someone who cannot serve them justice, reevaluate where that leaves your business, especially in continuity risk areas.

Start with what leadership of an accounting function governs, because it is might not align with what owners and executives often think. They think they are buying deliverables: a monthly close, a tidy set of statements, a clean package for the tax preparer. The deliverable is the visible tip of the iceberg. Underneath it sits three responsibilities that rarely show up to overall leadership and sit as a sort of quick litmus test of its health. When the function is healthy, an owner never has to see them. When it fails, the visibility becomes the story of the failure but in postscipt, not in real time. There is a delated reaction.

Learn the accounting assertions. Every financial statement is a set of claims. In plain english: that the revenue existed, that the liabilities are complete, the cutoff timing is buttoned up, that the balances are valued correctly and belong to the entity doing the reporting. Accountants call these assertions, and putting your name on a statement means standing behind them. The bookkeeper who kept our contractor's books for three decades carried that framework in his head. He knew which accruals mattered for this business, how revenue tied back to each division, what "complete" meant when the same crews billed WIP across three entities. The reports looked competent because someone competent stood behind the claims and knew that the data was complete. His replacements produced identically formatted reports with nothing behind them. Same deliverable, no assertion. They know the reports are accurate, but have no way of knowing that everything that should have been reported actually is. That gap stays invisible until a lender, an auditor, or a buyer hones in on it, which is precisely when it becomes very expensive.

Reviews, approvals, and controls. These are the workflows that, in our contractor's shop, lived entirely in Jim's head. Who can move cash. What gets a second set of eyes before it posts. Where segregation of duties actually sits when the team is four people and two of them are siblings barely on speaking terms. In an owner-led business these controls are often real but starkly informal — verbal and judgment sort of deals, rather than written into the process. That fragility can be managed, but breaks as soon as personnel changes. Leading the function means making the control structure explicit and durable, so it survives a retirement, a resignation, or a bad month. You cannot retrofit controls under a refinancing deadline anymore than you can build a sales pipeline to capture lost opportunities.

Capacity and planning. The accounting function has to be sized to the work and sequenced against the calendar. Closes, filings, debt covenants, audits, new customers, etc. Our contractor's failed Controller hire was a planning failure before it was a hiring failure. Capacity is the match between the work the business generates and the structure built to carry it. Headcount without that match is what they bought, and it failed twice before they called us. They tried to create a title to solve a structural problem, dropped a senior person into an undocumented function with no established structure, unclear authority vs. responsibility, and were surprised when it did not work. Had that been a new revenue producing Division VP they would have seen that coming and spent more resources to onboard, but backoffice has a way of blinding leaders like that.

None of these three appear in the deliverables, which is exactly why they are the first thing to erode but sit hidden until they eventually morph into thing leadership notices, at which point it is quarters or years too late . Leading an accounting function means owning them purposefully, in writing, independent of any single person's memory.

The Challenges are Structural

None of this is a story about one company's bad luck or one leadership team fumbling the ball on during a difficult backoffice succession. The gap our contractor fell into is structural, it is common, and two forces continue to widen the gap as more Jims continue to retire.

The first is that the work itself has been changing and that change is accelerating. You know this to be true, but the how and why is obscure unless you live it daily.

The data-entry floor of accounting: the keying, the matching, the organizing, the reconciling is being automated, some of which is AI but most is just catching up on OCR and deterministic automation. Tech forward industries such as SaaS and eCommerce have already automated the bottom of the pyramid. We help the real estate and service businesses we work with advance toward sensible automation.

What is left after the rote is managing the chaos and judgment: the classification calls, the accrual decisions, the divisional segmentation a lender actually wants, the interpretation of numbers that no longer enter themselves. The hardest part, the part that usually causes the breakdown, is the juggling and prioritization of it all.

The volume of rote work is falling, and the density of judgment is rising, against the same deadlines and usually the same or smaller headcount. This is the trap buried inside the "bookkeeping is a commodity" assumption and also the reason all the automation promises ring hollow. It was always half wrong, and automation is making the wrong half higher stakes and more chaotic to manage. The residual judgment layer was never a commodity, and when it fails in a bad succession, it fails quietly and slowly. Moreoever this often is diagnosed as a bad bad hire, then the business goes back to the well a couple times before realizing these hires were all doomed to fail.

The second force is the shape of the org chart. Most CEOs did not come up through accounting and carry no deep training in it. Normal and fine, until it means no one at the top can tell the difference between an accounting function that is actually healthy and one that merely looks healthy becuase the tip of the iceberg is still above water. So leadership of accounting lands in a blind spot: above the bookkeeper, below a CFO the business does not yet have, owned by an owner who assumes the function runs itself.

The two headwinds converge and we get the current environment as a result. The work is becoming more difficult and rigorous, higher risk, and those tasked with it are undertrained, underpaid, and under-resourced. It's not sustainable.

Do You Have What It Takes?

For most capable owners, the honest answer is no. Leading an accounting function is a distinct discipline, and it competes for the exact attention you should rightly be spending on sales, operations, and growth. The owners in our story did not lack talent or smarts. They had the midas touch on the sales and operations side. What they lacked was a reason to treat the office as something that had to be led rather than assumed to be managed from afar.

So the question behind the question is not "can I do this myself." It is "have I installed this so it doesn't depend on me, or on any single point of failure" Assertions that are backed by documentation and procedures. Controls that are documented both at the execution level and procedurally. Capacity that is intentionally planned with wiggle room for the fires and deadlines. Once that layer is standing, it stops mattering who retires, who quits, or who moves to Key West. The goal is to build the accounting function dependable, not personality dependent.

That standing layer is also what lets you move fast on everything coming next. The temptation with AI in accounting is to bolt automation onto an ungoverned function and hope the speed covers the gaps. Wrong plan. It won't; it will move the errors faster. We're already seeing slop accounting come to fruition with this approach. On the flipside, a function with the governance already installed can harness technology to adopt deterministic automation aggressively, because there is a control structure to catch errors and exceptions with a human standing behind every assertion.

Good governance enables efficiency, but building the governance infrastructure is where the work needs to be led by professionals. You wouldn't have a CFO leading the tree removal crew or overseeing the framing laborers, so why would a CEO that grew up in ops being leading an accounting team?

Joe Minich, CPA
Founder of Ridgeline Business Solutions. Joe works as an embedded financial operator and readies businesses for the accounting of the future. Ridgeline helps owner-led businesses in property, real estate, and skilled trades navigate growth, transition, and operational challenges.