In order to survive and emerge as a leader in the market, it is necessary to improve all business activities – both internal and external. As an entrepreneur, you must encourage all departments and employees within your company to work as one and develop innovative ideas to improve overall efficiency.
However, one business aspect that requires careful consideration is business accounting. This is because accounting processes will always significantly impact your company’s daily operations, bottom line, and long-term sustainability. In addition, some accounting tasks are too laborious to manage without tech-based solutions, so they need constant innovation to benefit the firm’s overall decision-making. A few of these crucial tasks include managing finances, keeping a record of the cash inflows and outflows, investments and liabilities, purchases and selling of assets, compliance with the IRS, etc. This is why any sloppiness in accounting processes could cause adverse consequences for the company, resulting in significant losses. Therefore, to avoid incurring such losses, it is best to optimize your business’s accounting process. Listed below are a few tips to help you out.
- Hire or train experts
The most straightforward way to improve business accounting is by hiring skilled accountants and a qualified CFO. Your best bet is to hire individuals who have completed an MBA with accounting concentration in key positions. That way, you’ll ensure that your accounting department/team is being led by someone with the correct know-how and skills to manage accounting-related tasks efficiently. If hiring a CFO is costly, consider hiring a junior resource and sponsor their higher education via distance learning opportunities on the internet. In addition, continuous training is essential to ensure your team is familiar with the latest tools and software to help simplify the accounting processes.
- Automate monotonous tasks
It would be wise to leverage technology and simplify complex and laborious accounting-related tasks to make the overall process more efficient. For example, you can use software for data entry and maintaining ledgers. You can also use cloud storage to store and secure sensitive data and yet allow access to authorized users from anywhere and at any time.
Also, AI in accounting systems will enable accountants to eliminate manual tasks like generating reports, creating invoices, managing taxes, and bookkeeping. The time saved here can be used more intelligently in data analysis and critical thinking to develop cost-saving business solutions. It also enables companies to operate with minimal labor and spend the saved money on accounting software developments. These software and programs make calculations more authentic, errorless, timely, and efficient.
- Reconcile payables and receivables
Managing your payables and receivables is one of the primary steps toward efficient reconciliation and creating accurate financial statements. It is essential to close your account payables and account receivables at the end of each reporting period for proper recordkeeping. Reconciliation gives you time to pay your creditors and avoid defaulting on your payables. Proper reconciliation also enables you to collect cash from your debtors before it’s too late.
Improving your credit management will allow you to secure your firm from bad debts. Employing software will enable you to maintain the sales volume. It will also allow you to withhold from selling to customers with meager credit. You can hire a credit manager or ask your account analyst to help you decide when to accept or cancel orders from these buyers.
Many small and medium-sized businesses do not have the means to hire skilled accountants and CFOs. This often leads to mismanagement of capital and assets, and delays in paying off liabilities, ultimately resulting in the collapse of the business. However, outsourcing is a great way to improve the accounting process with several other business benefits.
Outsourcing saves you time, human capital, and money. Instead of spending resources on training and development, you can hire another agency with dedicated services to do the job for you. Outsourcing also allows your in-house staff to invest their energy in other crucial business aspects such as marketing and customer relationship management. In addition, a third-party accounting company is more likely to be up-to-date with the latest in accounting tech. As a result, it will provide better process management and decision-making services.
- Implement batch processing
Processing invoices and receipts can be tedious work, plus it requires a lot of time. Since finance and accounting majorly deal with sales and purchases, you need to produce such paperwork regularly. To become efficient in this practice, you need to save time and effort in processing hundreds of invoices per week. Therefore, implement batch processing – an accounting practice that enables you to store multiple records and generate invoices at the end of the day, week, or month.
Accountants can use batch processing to add employees’ time cards, mail bills, enter bank statements, or deposit cash in accounts. You can ask your staff members to wait until they can submit their invoices together so that the system can group and then process them all at once.
However, some documents need immediate processing and cannot wait for an extended period, such as inventory reports. Many companies have shifted to online processing for such operational activities to maintain accuracy and generate reports promptly. It has proven to be very helpful in improving accounting practices and ensuring efficiency in the business.
Improving business accounting is essential to manage day-to-day business operations. Efficient processes also ensure a company moves towards sustained growth. Therefore, hire and train expert accountants. If the cost is too high, consider outsourcing to a third-party accounting firm. Also, regularly reconcile payables and receivables, automate manual processes, and employ batch processing to save time and money lost in old unproductive methods.