Accounting is a crucial part of running a business. It records, processes, and converts the financial data of a business into useful information for decision makers, regulators, and stakeholders. It’s important to bear in mind that this information needs to be promptly and accurately processed and presented. As such, the accounting process should be made efficient.
The following ideas should help create a more efficient accounting process for companies of any type and size.
- Set strict deadlines and cutoff policies.
This may sound too generic to be pointed out here but it’s something that needs to be emphasized in accounting departments. Timeliness is a fundamental attribute of accounting information that everyone should be mindful of the deadlines they are given. Delays should have consequences for those responsible for them. Cutoff dates or times should be strictly enforced to encourage prompt document or report submissions and to avoid delays in the production of financial statements.
In cases when vital documents or reports are not submitted on time, it would be advisable to require everyone in the department to help expedite the production of reports or the retrieval of information needed. Instead of just blaming and penalizing the employee responsible for the delay, it would be more productive to extend help where needed. Certainly, you cannot compromise the accuracy and timeliness of the information contained in the financial statements by giving greater priority on cutoff dates and deadlines. Just like in most other aspects of doing business, it’s the results that matter, not the effort. Nobody cares about what happened behind the scenes if you can’t produce accurate and timely financial statements.
- Use a good accounting software and related software or apps.
It’s a rarity nowadays finding a business that does not use an accounting software. It’s not simply because it’s what everyone is doing but because the use of software definitely makes doing business easier. Even small businesses benefit from the use of accounting software. A cloud based accounting software such as quickbooks on azure WVD can be a handy tool for SMBs. Quickbooks hosting providers like Apps4Rent can help you with adopting to cloud based quickbooks. It makes the recording, storage, presentation, and sharing of accounting information exceedingly easier. The use of accounting software also leads to greater records accuracy, more convenient records reviewing, and ease of adjusting. Also, consider getting other business software that complements accounting software. A multi-job invoicing software that can integrate with your accounting system, for example, is worth investing in. In the similar way accounting/invoicing software such as quickbooks, wave etc. integrate well with other essential office applications like Office 365 to yield better productivity. Learn more about O365 Migration.
- Do batch processing.
Being timely with your accounting information does not necessarily mean that you have to process every new invoice, check, or financial information as soon as you receive them. Learn to process them in batches to save time and effort. Set a regular date for processing checks or requests for reimbursements, for example, so you can efficiently deal with them in one go.
- Refer to best practices.
Accounting is not some new discipline only a few are using. It’s been in existence for hundreds of years. It has been used and improved by its numerous user’s generation after generation. Over the course of its evolution, best practices have emerged. These include the need to adhere to the principles of consistency, good faith, permanence of methods, non-compensation, prudence, continuity, periodicity, and full disclosure. These should serve as an excellent guide in coming up with efficient accounting processes that are also compliant with government regulatory requirements.
- Automate where possible.
Payments and invoices can be automated. Don’t waste time manually dispatching these functions. There are other aspects of financial record keeping in a business that can be automated. Identify these and use your accounting software to automate. You can employ automation for accounts payable and receivable processes, audit documentation, manufacturing documentation, functional testing reports, inspection reports, defect reports, bills of lading, proof of delivery, order tracking correspondence, and monthly close processes.
- Be mindful of taxation.
The filing of tax returns is a major event every business is concerned with. It has a deadline that gets everyone wary. Avoid getting caught by the deadline panic by making sure that your taxes are properly considered in the accounting process. Your system should make it easy to prepare and submitted tax documents. Small businesses particularly need good tax-related insights to make sure that their accounting process results in accurate, compliant, and timely reports and financial statements.
- Consider reviewing your accounting workflow for possible tweaks or improvements.
Eventually, as a business grows, changes emerge. You need to make sure that your accounting process adapts to these changes. Take time to review your process and evaluate if there are steps you can forgo, tasks that can be automated, or mechanisms that may require stricter scrutiny and control. Consider how other departments perceive your process, in relation to how theirs interacts with yours. There could be steps other departments find to be just a waste of time. Some may find loopholes in how you go about with your accounting process. Listen to what others have to say.
An efficient accounting process is one that eliminates delays, guarantees data accuracy, and makes the job easier. The points mentioned above should be useful in achieving greater accounting process efficiency regardless of business type and size. To be efficient, there needs to be strict adherence to deadlines, the use of a good accounting software, and proper batch processing. It should also take best practices into account and be conscious of the need for timely and accurate financial information. Moreover, it has to be flexible, scalable, and be open to tweaks or adjustments necessary to adapt to changing business situations.