Modern bookkeeping has come a long way over the past few decades.
For instance, bookkeeping software like QuickBooks and Xero automatically import transactions from a bank account and categorizes them based on your past actions, then produces financial reports on demand.
Despite these advancements, many accountants still don’t utilize modern technologies and best practices to simplify financial processes.
There is a lot of thought leadership on the subject of improving efficiency in financial operations, with new statistics being thrown around every day. That’s not surprising: more efficient business processes lead to higher productivity and employee satisfaction by reducing stress. Many large organization uses bookkeeping services or softwares to do so as well as small businesses.
It’s an obvious win-win situation, but with so much contradictory information out there, it may be overwhelming for most bookkeepers.
Being a specialized bookkeeping company, we experiment with novel accounting techniques every day. Here are some of the best-performing techniques to improve the efficiency of bookkeeping operations in every industry.
10 Techniques to Improve the Bookkeeping Efficiency
Let’s discuss the best ways:
1. Leverage the Latest Tools and Technologies
You can improve your finance and accounting processes by switching to automatic bookkeeping software solutions. You are wasting valuable time if you are still using manual books and ledgers to track down and record financial data such as expenses.
Using bookkeeping tools, you can enter data, perform calculations, and benefit from a higher level of accuracy than if your accounting and finance departments relied on manual reporting. For example, Fluidly, is a payroll and automatic enrollment software program that helps businesses manage cash flow effectively.
You may already be using various technologies and tools in your everyday bookkeeping jobs, from QuickBooks to Basecamp to Gmail, for bookkeeping and internal and external communication.
However, without integrations between these software tools, you will spend more time transferring files than accomplishing the work, and you will experience a lot more stress as a result.
Zapier is one of the best tools to connect different software programs. You may start a procedure from any application, select a trigger that initiates a zap, and connect it with over 3,000 other applications. In addition to accounting duties, zaps are ideal for marketing automation and other practice-level jobs.
2. Use Batch Processing
Processing an invoice as soon as it arrives is not the best approach for a company handling numerous transactions daily. Every time an employee from accounting or finance stops to process an invoice, they are distracted from other duties.
Batch processing can take place at any time, but it is best used for end-of-year processing. It can assist with tasks like payroll, month-end reconciliation, or settling transactions overnight.
It is critical to have digital solutions to help collect all this information, as batch processing involves handling tons of information at once. If the inputs are incorrect in some way, the entire batch will be flawed. Therefore, it is best to have all expenses, invoices, payroll information, and so forth operating simultaneously.
3. Store Data at a Centralized Location
Time has proved that email is the most widely utilized electronic communication method. It’s tempting to leave financial receipts and other files in your inbox after you’ve been sent them via email, but that comes with significant risk.
You could accidentally erase the email, lose access to the email account, or, worst of all, hackers might gain access to the account and steal your sensitive financial information.
These days, there are many secure methods to store and transfer files. For example, Dropbox, Box, and other file-sharing applications make it simple to share agreements, invoices, receipts, tax returns, letters, and other documents in the cloud. Many of these programs also integrate with popular accounting platforms.
Moreover, platforms like Avaza and Omnidek provide an all-in-one platform that integrates file sharing into your overall workflow. For example, you can request that your vendors and customers uploads receipts in the portal, and when they do, the file will be connected to the concerned department.
4. Use Corporate Purchase Cards
Instead of dealing with voluminous items under $100, an accounting staff should distribute a purchase card to every company employee. Small-ticket items can be consolidated into one check and prevented from requiring several envelopes, postage, and maintaining multiple vendors in the accounting software, thereby saving time and resources.
Moreover, companies that micromanage by allocating every item on a corporate card bill to a specific charge code should consider the cost versus the value they receive.
For example, some companies feel that every transaction on a company Visa bill must be captured to the penny, resulting in every item being charged to a different code. It’s not worth the time and effort for someone to check the items’ validity, assign codes to them, and do hundreds of entries. Using one charge code per card simplifies accounting in most cases.
Also, individual employees who frequently travel on company business can receive company cards, which can reduce the number of bills received by accounts payable. In contrast, accounts payable may have to dedicate one or two people to reconciling such items (i.e., airline tickets charged to the company) with employee expense accounts if companies do not follow this approach.
5. Change Purchase Order Items Vouchering
When purchasing inventory, raw materials, or even supplies and services, accounts payable staff can waste a lot of time verifying invoices against purchase orders, especially if the purchase order doesn’t provide sufficient purchase order information.
Companies can prevent this issue by having the employee or department purchasing provide financial information such as charge codes, payment terms (speed of payment), payment methods (wire or check), and vendors’ remittance addresses.
Also, firms should seek out the purchasing employee or department for the tax code that reveals how the product will be utilized, as it may affect state and local taxes.
For example, maintaining or repairing a machine might require special tax treatment. These methods prevent time wasted in verifying information or returning invoices to the originating department.
Moreover, accounts payable personnel must set aside and wait for further instructions when discrepancies exist between the amount ordered and the shipment’s invoice. Accounts payable personnel must be able to determine whether the purchaser will accept shortages or surpluses.
To avoid this frustration, enterprises may set up a tolerance range in their software for either vendor or by product variance. There can be no leniency whatsoever, or the amount shipped might be permitted to vary by up to 10%.
6. Improve Credit Management
Sales representatives are not paid to collect money but to make sales, so many companies make sales without checking customer credit. Slowed credit checks may result in bad debts, resulting in monetary loss to the company.
When using software that allows credit checks to be made during order entry, it is advisable to switch to one that does not. If a company’s current software already allows this, CPAs should encourage its use.
A good software program can enable the sales force to maintain their order volume, but it puts a stop to orders from people with poor credit scores. Credit managers may then decide whether to allow or decline these people.
7. Reduce the Monthly Closing Time
Because of the custom of publishing financial statements in the middle of the succeeding month, many businesses are unable to react quickly to alterations in the business landscape.
A fully integrated software package can reduce this delay significantly by feeding accounts payable subledgers into the general ledger automatically so that they can be automatically summarized and reconciled with the general ledger, thereby eliminating the time and labor required to do so manually. This may result in significant savings for companies that do monthly closings in addition to reducing processing time.
8. Set Up Separate Coding for Projects
The CPA should set up a separate coding for building an addition to a company’s facility so that those costs are tracked in the general ledger and included in accounts payable. By eliminating the handling of a transaction twice, the project manager is able to compare the budgeted costs with those for the ongoing project.
If the company’s current software package does not have this functionality, a standalone application that connects to accounts payable and that is accessible for project management should be purchased.
9. Capture Tax Info When Source Documents are Processed
CPAs should note that it is inadvisable to perform a transaction twice. For example, companies commonly record a purchase (i.e., for internal repairs or maintenance) and revisit it in the future to determine the appropriate tax treatment. But, Ideally, it is advised not to handle a transaction twice.
Modern accounting software are able to handle tax issues more efficiently. Furthermore, the package of the software itself should record and report all transactions. If the company’s system does not include this feature, another piece of software can be purchased and “bolted” onto the existing system.
10. Integrate Fixed Assets to the General Ledger
As it has very little impact on a company’s day-to-day operations, this system is often neglected when a firm wishes to modernize its financial operations. For accounting purposes, a corporation must keep accounts for fixed assets, financial statements, and depreciation. Capital expenditures that are finished should be immediately capitalized as fixed assets that begin to incur depreciation immediately.
When a software package integrates data subsystems with the general ledger and accounts payable, updates to the fixed asset subsystem are automatically reflected in the general ledger. This ensures that capital projects are properly accounted for as fixed assets and that they are processed in a timely manner. This integration also eliminates one more duty from the monthly closing list.
Summing Up
Despite recent advancements in bookkeeping, many workers in the profession still aren’t using contemporary technology. The ten pointers we listed above can assist you in simplifying your bookkeeping processes and focusing on your unique value-added services.
If you still need help with your bookkeeping, you can check out our bookkeeping USA services. We’re a specialized bookkeeping service provider for several industries and places like New York, Chicago, Austin, and other cities.. We’re helping businesses record and understand their finances, reduce tax burdens, and improve financial health.
