Accounting systems are the backbone of any business. They help us to ensure we have accurate record-keeping, financial analysis and decision-making items at our fingertips. If you’re looking for ways to streamline your processes and work more efficiently, learn more about how to develop and improve accounting systems below.
Analyze Existing Processes
Have you recently taken stock of your existing processes and workflows? It may be time to identify strengths and weaknesses. You may find obvious inefficiencies, such as data entry or delayed incoming payments. Maybe your technology is behind, and you could benefit from integrating new accounting tools and software solutions. Remember that your technology can either create amazing leverage in your business or it can be the cause of inefficiencies.
By documenting existing processes, you’ll be able to identify where your biggest gaps might be. Consider speaking with team members directly involved with different areas to get their take on the strengths and weaknesses of the accounting process, as well.
Utilize Automation and Integration
Automation saves time by speeding up different (but repeatable!) accounting duties, allowing you more time to focus on more significant tasks. It also can significantly reduce the risk of inconsistencies and human error.
Different software features could automate routine tasks such as invoice processing, payroll, bank reconciliations and more. You can set up accounts to download transactions directly from your financial institution. Manual data entry has a large rate of user-error, so by automating this task, you can increase productivity and know things are being entered correctly.
You can also work to integrate your accounting software to other business systems like sales, inventory, and payroll to streamline data and improve reporting accuracy. What an amazing way to seamlessly transfer data and have real-time access to your financial information!
Reconcile Regularly
A great way to improve your current accounting system is to perform regular account reconciliations. You will want to ensure the accuracy of your financial records and make sure you identify any discrepancies right away.
Automatic reconciliation can streamline the process. With advanced functionality like automatic invoice matching and transaction categorization takes a lot of the pain out of the process. Don’t make things complicated and confusing by waiting to do this at the end of the year. You may have more problems than you anticipated, which could make tax season a nightmare. Be proactive!
Run Monthly Reports and Analytics
Producing monthly reports helps with accounting process improvement. It will help departments make informed decisions when it comes to budgeting and expenditures. You should always be reviewing cash flow statements, balance sheets, and accounts payable/accounts receivable (A/R) regularly. This data can be automated to reconcile with bank transactions (as previously mentioned) to ensure accuracy across your books.
By regularly analyzing financial reports, you can identify areas for further improvement in your accounting processes. It’s also useful with your automation implementations that you will have access to real-time data, enabling faster decision-making.
Create Clear Policies & Procedures
Having policies and procedures that are clearly defined about how you use your accounting systems is imperative. It can help you see where you lack efficiencies, see which departments are in control of which areas, and can help to see what you may need to change. A lack of standardization across your business means that different employees may use different methods for doing tasks. Make sure you communicate polices with everyone involved, as well.
But don’t forget to monitor, regulate and enforce your policies, otherwise they are meaningless. It also promotes transparency in your organization.
Perform Regular System Audits
Minimize risks to your data and business with a strong checks and balances system. Regular audits will help to identify weaknesses, inefficiencies or potential vulnerabilities. You can than pinpoint areas for improvement, data discrepancies and see where you may be able to enhance system performance. This will help your business to ensure the accuracy, integrity and reliability of all your financial information.
Staff Training
Anytime you change processes or roll out new accounting software and technology, it’s imperative to take the time to train your staff on how it works correctly. They need to feel confident that they know how to use it and can easily troubleshoot anything they may have issues with. Make sure you invest in continuous training and development to stay updated with the latest industry standards and best practices.
Consider Outsourcing Tasks
Many businesses choose to outsource tasks such as payroll, AR collections, tax prep and other accounting practices that are too complex or time-consuming to perform in-house. Outsourcing can be more efficient and is a great way to give you access to an expert in this field. It will also free up your time to work on items that you CAN do efficiently and effectively.
Having a smooth and efficient accounting system isn’t just about saving time and money. You also want to ensure you have accurate bookkeeping, you are tax compliant and have strong cash. As technology continues to improve, it’s more important than ever to modernize operations and prioritize your accounting process. Automating time-consuming tasks will help you save time and scale up your business with confidence.
If you want to know how to develop and improve accounting systems, reach out to Knecht Business Solutions today to learn more about how we can help you do just that!