Are you struggling to keep on top of your accounts? Maybe you have thought about outsourcing this task but would prefer to keep it in-house.
For anyone who does not have experience in the complicated world of finance, accounting can be a bit of a nightmare, to say the least. Fortunately, there are lots of tools and techniques you can use to help you effectively manage your company’s finances and even boost your profits.
Discover them all right here!
Why should you streamline your business accounting processes?
Before taking a look at how to streamline your accounting processes, let’s first delve into why you should do this in the first place.
Increased accuracy
When you streamline your accounting processes, there is less manual work for your accountants to do. In particular, automation tools can prove to be extremely useful in improving accuracy as they remove the need for manually entering transactions.
Reduced errors
When there is no human error involved, there is a lot less room for mistakes, which is hugely beneficial for your business. Streamlined accounting processes result in much less room for error, so you can enjoy peace of mind that your accounts are all in order.
Better control
Do you wish you had more control over your company’s finances? When your accounts are streamlined, it is a lot easier to monitor what is coming in and going out and also to identify any small costs that have been previously overlooked.
Improved teamwork
If you have a large number of employees working for you, streamlined accounting processes enable everyone to collaborate and contribute ideas. For example, if you use cloud accounting software, such as the ones provided by ORBA Cloud CFO, everyone has access to the same information and can benefit from it accordingly.
How to streamline your accounting processes
1. Use accounting software
If you don’t have a dedicated accountant or finance department, accounting software is your new best friend. Helping organizations manage and record all their day-to-day financial transactions, accounting software can be an absolute lifesaver for business owners who are struggling with their accounts.
There are many different types of accounting software to choose from, including:
- Billing and invoicing software
- Commercial accounting software
- Custom accounting software
- Cloud accounting software
- Enterprise accounting software
If you are worried about committing to a specific software program only to find out that it is not right for you and your business, look for ones that offer a free trial so that you can try before you buy.
2. Prioritize cash flow management
Cash flow management involves tracking all the money coming into your business and monitoring it against any outgoings, such as utility bills, employee salaries, and any commercial property rental costs.
When you have a healthy cash flow, it reduces the amount of financial stress on your business and this, in turn, can help to make your accounting processes more straightforward.
There are lots of steps you can take to help improve cash flow within your business, including:
- Monitor your cash flow closely and make any necessary adjustments.
- Have an emergency backup plan in place.
- Identify any issues as soon as possible.
- Make frequent projections.
- Use cash flow management tools.
As a general rule, to ensure good cash flow, you need to have at least 9-12 months’ worth of expenses put aside.
3. Segregate internal practices
How hands-on are you when it comes to your internal accounting processes? If your answer is “not very”, then this is something that needs to change. Businesses must implement and maintain a strong system of internal controls concerning their accounts, as this can help to prevent errors and streamline processes.
For example, you should not have the same person handling cash and recording transactions in the books. Instead, you need to make sure you segregate duties to reduce the risk of fraud. As your business grows, the segregation of duties becomes even more important.
Here are the best practices for implementing internal controls to prevent fraud:
- Bank reconciliations should be carried out by someone other than the person making cash deposits and withdrawals.
- The employee entering bills and preparing cheques should be different from the person signing cheques.
- Assign an employee to review and sign off payroll.
- Review financials monthly, including a review of cash flow.
4. Invest in employee training
If you want to take care of your accounting processes in-house, you need to invest in regular employee training so that your team members have the skills needed to manage your accounts.
Make sure that the people responsible for monitoring and managing your accounting processes are up to date on the latest compliance rules and regulations, as otherwise you run the risk of fraud.
There are several benefits to providing continuous training, including:
- To reduce the need for supervision so that employees can perform their duties independently.
- To boost employee morale and make your staff feel more valued and confident in their abilities.
- To increase productivity. Regular training ensures that the relevant employees know the latest best practices.
- To promote uniformity and make sure everyone is on the same page, which results in faster and better results.
5. Outsource payroll
Payroll involves calculating total wage earnings, withholding deductions, filing payroll taxes, and delivering payments, all of which can be incredibly time-consuming if you choose to carry it out in-house.
The beauty of outsourcing your payroll is that you are guaranteed a high level of expertise, which means much smaller margins for error. Furthermore, when you choose to outsource, it frees up your time to focus on your core business goals.
Other benefits of outsourcing your payroll include:
- Save money on hiring a payroll administrator
- To improve security and data protection
- To maintain compliance
- To integrate data with other applications
When choosing a payroll outsourcing provider, make sure you find one that has the knowledge and technology needed to provide accurate and timely results.
Final thoughts
Although there is no denying that it takes time, effort, and resources to streamline your accounting processes, the results will be more than worth it. Enabling you to save money, free up your time, and have more control over your business’s finances, once you have streamlined your accounts, you will wonder why you didn’t do it sooner!