16 Aug 10 Steps to Streamline Business Bookkeeping
Financial recordkeeping can be one of the most time-consuming tasks a business owner faces, yet there are ways to streamline this process and free up more of your valuable time for other areas of your enterprise.
Start by documenting your current accounting processes to help identify any areas where your workflow could be improved through modern technologies and integration tools that reduce manual tasks and error rates.
1. Invest in Accounting Software
Accounting software is an indispensable asset to modern businesses. Gone are the days of tedious ledger-checking at month’s end; now modern systems make quick work of processing transactions and financial reports.
Choose cloud-based or in-house accounting solutions tailored to meet your business’s specific needs – some platforms allow users to print shipping labels alongside invoices and orders while others send past-due reminders automatically.
Automation eliminates manual processes, improves accounting accuracy and enhances collaboration among key employees, while freeing your team members to focus on tasks that add greater value to your company. Automation provides essential capabilities for businesses looking to grow and prosper; providing a framework for understanding numbers meaning so it becomes easier to make well-informed decisions regarding business strategies.
2. Automate Your Processes
Automating processes is essential for increasing efficiency, eliminating mistakes and staying ahead of the competition. That means investing in technology that automatically imports bank transactions, creates recurring invoices and categorizes expenses.
Automation tools may not replace human employees entirely, but they can greatly reduce operating costs by speeding up accounting processes. They also eliminate risks of error while speeding up growth by freeing your staff up for more complex tasks that require critical thinking.
Start automating your processes by first evaluating and documenting current workflows. Next, implement automation technologies, establish clear procedures, schedule regular reconciliations, and maintain effective internal control measures. Lastly, regularly evaluate automated processes to make sure they’re functioning as intended – this allows you to identify any areas for improvement and make necessary changes.
3. Delegate Tasks
Delegating tasks can help free up time for more important work and allows you to concentrate on what matters. But effective delegation requires planning and preparation – you will need to find someone with the capabilities of carrying out each task efficiently. A CPA can help with your books and organize everything you need for example.
As well as giving them detailed instructions and checking on them frequently, this helps ensure the task is completed accurately and on schedule.
Notifying your staff of your appreciation can help motivate and foster a positive working environment. Once a task has been completed, review it with them and give constructive feedback so they can improve in future performances. As time progresses, delegate more and more work to your team so you can focus on more strategic tasks for your business.
4. Organize Your Files
An efficient accounting system is key to streamlining bookkeeping. Not only does it save time, but it can also create a positive impression with suppliers, clients, and customers.
Start by sorting all physical documents into categories, such as reports from invoices or client documents. After this step is completed, create a hierarchy of folders that make sense for your business and name them accordingly.
After moving files to their new homes, arrange them alphabetically by year or month. Although this process might take time, organizing your files will pay dividends in the form of faster accessing what you need and less errors due to disorganized records. It will also ensure your books stay current; for example, some files recur regularly so it might make sense to group them by date of creation or modification.
5. Establish Clear Procedures
Business owners can become so preoccupied with day-to-day organization and client fulfillment that financial maintenance may become neglected, which could create inconvenient, time-consuming crises in the future.
Establishing a regular process for updating and monitoring accounting can help avoid these problems. Eversmann suggests businesses set aside one hour each month dedicated to reconciling and sorting through financial data.
She advises businesses to find a bookkeeper who is responsive and willing to collaborate on long-term goals, helping prioritize taxes, payroll and more. Such an arrangement can save companies both time, money and energy over the long term by eliminating costly disorganization and overbearing workloads so they can focus their energies on expanding their businesses instead.
6. Invest in Internal Controls
An effective internal control system can help mitigate fraud and errors, including segregating duties to ensure different employees don’t handle cash or record transactions in the books simultaneously; additionally, setting clear lines between receiving goods and services and authorizing invoices will create additional protection from fraud and errors.
COSO (Committee of Sponsoring Organizations of the Treadway Commission) defines internal controls as interlocking sets of activities designed to provide redundancy beyond normal operating procedures in an organization.” Such processes help protect companies against fraud and help ensure financial reporting integrity.
To develop effective internal controls for their business, businesses must conduct a risk evaluation first. This step helps businesses understand which areas are prone to error and fraudulent activity and devise appropriate internal control measures such as separate duties, security restrictions and access controls, review reviews, training programs and ongoing evaluation of processes.
7. Train Your Staff
Integrating bookkeeping efficiencies into your business operations can save time and money, but the real benefit lies in making sure your accounting team has access to appropriate training and resources.
Poor training can result in errors and mismanagement of financial data, leading to errors and oversights that compromise its integrity. To avoid such problems, provide onboarding and ongoing training to both new employees as well as experienced staff members.
Assign different people the different tasks involved with bookkeeping, such as approving invoices, collecting checks or payments, depositing cash and reconciling bank accounts. Allowing one person to perform all these duties increases fraud risks while decreasing efficiency. Also consider providing more formal training options like seminars and workshops for your accounting team members; these could help them develop professionally while increasing productivity, client service quality and company culture promotion.
8. Schedule Regular Financial Reconciliations
Accounts reconciliation involves comparing a company’s internal ledgers with bank statements from external banks to identify discrepancies between the documents, then making necessary corrections – an essential step for effective cash-flow management and to prevent fraud.
As an example, customer checks sent directly to vendors may have not cleared through banking systems before being recorded as paid by businesses; as a result, their cash balance could become inaccurately depicted. Frequent bank reconciliations can help identify such errors quickly and remedy them quickly.
Automating these processes increases accountability by ensuring policies are adhered to and reconciliations completed on time, helping avoid oversights, decrease word-of-mouth accountability and enhance overall operational efficiency. A streamlined accounting process also can prevent errors and fraud as well as ensure accurate financial records that help safeguard cash flow.
9. Simplify Your Chart of Accounts
Optimizing your chart of accounts is crucial for creating financial statements, providing tax data to the IRS and state departments, and giving potential investors and lenders an accurate snapshot of the company’s current and historical financial health. A carefully executed renovation can be completed relatively quickly with immediate improvements made to your reports.
Maintain a unified account numbering scheme across your chart of accounts to make reading the account structure simpler. Also when adding new accounts, be mindful to create spaced-out numbers to accommodate for potential future growth (for instance a company might create 43000 COS-Hardware as one way of tracking cost of goods sold directly to customers). Avoid adding too many accounts as too many could result in an overwhelming general ledger.
10. Automate Your Invoices
Employing an effective accounts payable automation solution can save both time and money for businesses. By streamlining the entire accounts payable (AP) workflow from invoice receipt to final payment, businesses can reduce fraud, enhance cash flow management and ensure accurate data entry.
Employing employees to process invoices manually is becoming less cost-effective for businesses; an automated invoicing system such as Make can help companies send invoices automatically after customers fill out a form on their website, and also be set up to alert when an invoice is due or has been paid – saving time and preventing extra work for your team if your hotel operates multiple properties with different charts of accounts.