Over the past few decades, contemporary bookkeeping has advanced significantly. Despite these developments, many accountants still need to use cutting-edge tools and industry standards to streamline financial procedures.
New numbers are circulated daily and there is a lot of thought leadership on the topic of better financial record-keeping. That is not unexpected because less stressful work environments increase productivity and employee satisfaction. Both small businesses and many large organizations employ bookkeeping services or software to do this. It’s a win-win situation, but given the confusing information, it might be too much for most bookkeepers to handle. Here are a few of the most effective bookkeeping tips to improve bookkeeping practices across all sectors.
10 Bookkeeping Tips For Increased Efficiency
- Take Advantage of New Tools and Technologies
Moving to automatic bookkeeping software solutions enhances your financial and accounting procedures. You are losing precious time if you are still tracking down and recording financial information, like spending, using manual books and ledgers. Instead of your accounting and finance departments relying on manual reporting, enter data, run calculations, and gain greater accuracy by using bookkeeping software. For internal and external communication, you may already utilize various technologies and applications in your routine bookkeeping tasks for better financial record-keeping. However, not integrating software tools will lead to spend more time transferring files than finishing the task, which will cause you much more stress.
2. Apply batch processing
For a business managing several transactions daily, there are better courses of action than processing an invoice as soon as it arrives. An accounting or finance person gets diverted from other tasks whenever they pause to handle an invoice. Although batch processing can be done anytime, it works best at the end of the year. It can help with jobs like payroll, month-end reconciliation, or overnight settlement of transactions.
3. Keep data in a single location
As time has shown, email is the most popular form of electronic communication. There are risks associated with leaving bank receipts and other information in your inbox after receiving them by email. The email might get unintentionally deleted, you might lose access to the account, or, worst of all, hackers could break into the history and take your private financial data.
Several safe file storage and transfer techniques available today make it easy to share contracts, invoices, receipts, tax returns, letters, and other documents in the cloud. Also integrated into many of these packages are well-known accounting platforms.
4. Make use of corporate credit cards
According to the accounting department, every employee of the organization should receive a buy card rather than dealing with complicated products under $100. Small-ticket purchases can be combined into a single check to save time and money by avoiding the need for several envelopes postage and maintaining various suppliers in the accounting software. Businesses that micromanage by assigning each item on a corporate card account to a specific charge code ought to weigh the expense versus the benefit.
5. Modify an item voucher for a purchase order
Accounts payable personnel can waste a lot of time while purchasing goods, raw materials, or even products and services, especially if the purchase order needs more purchase order information. Businesses can avoid this problem by requesting financial data from the employee or department purchasing, such as charge codes, payment terms (speed of payment), payment methods (wire or check), and suppliers’ remittance addresses. Additionally, businesses should ask the purchasing department or employee for the tax code that discloses how the goods will be used since this information may impact state and local taxes.
6. Enhance credit administration
Since salespeople are paid to close deals rather than collect money, many businesses close sales without running credit checks on their clients. Slow credit checks may lead to bad debts, costing the business money.
Switching to software that does not enable credit checks to be performed during order entry is advised if you are already using software that does. CPAs should promote its use if an organization’s current software supports this.
The sales team can sustain their order volume with the help of a suitable software program, but orders from customers with bad credit are prevented. Then, credit managers can choose whether to approve or reject these applicants.
7. Shorten the month-to-month closing time
Many organizations cannot respond promptly to changes in the business environment since it is customary to issue financial accounts in the middle of the following month. By automatically transferring funds payable sub-ledgers into the general ledger so that they may be immediately summarized and reconciled with the public ledger, a fully integrated software program can considerably reduce this delay and eliminate the time and labor needed to do it manually. In addition to cutting down on processing time, this might result in significant savings for businesses that do monthly closings.
8. Establish distinct coding for projects
The CPA should establish a separate coding system to ensure that the expenditures associated with constructing an expansion to a business’s facilities are recorded in the general ledger and included in accounts payable. The project manager can compare the anticipated expenditures with those for the ongoing project by avoiding handling a transaction twice. If the company’s software solution lacks this feature, a separate program connected to accounts payable and project management access should be bought.
9. Gather tax data Processing of Source Documents
CPAS need to remember that repeating a transaction is not recommended. However, it is recommended to avoid handling the same transaction twice. The handling of tax issues by modern accounting software is more effective. Additionally, the software program should track and report all transactions. If this functionality is missing from the company’s system, another piece of software can be purchased and added.
10. Convert fixed assets into general ledger entries
This system is frequently overlooked when a company wants to modernize its financial processes because it barely affects day-to-day business operations. A corporation is required to maintain accounts for fixed assets, financial statements, and depreciation for accounting purposes. Finished capital expenditures should be immediately capitalized as fixed assets that lose value immediately. Updates to the fixed asset subsystem are automatically reflected in the general ledger when a software package combines data subsystems with the general ledger and accounts payable. This guarantees that capital projects are handled promptly and appropriately accounted for as fixed assets.
Although bookkeeping has recently advanced, many professionals in the field are still not utilizing modern technology for better financial record-keeping. The ten bookkeeping tips we provided above can help you improve bookkeeping practices and concentrate on your special value-added services.
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