The accounting department of your business should not be taken lightly. It is one aspect of your business where all the hard work is put in to check if your sales match the cash on the bank books, if your business is breaking even or earning even a little profit, or if there might be any financial issues that should be addressed. Hence, a prudent business owner would naturally be very vigilant in checking their business accounting process regularly to see if it is still up-to-date. This article gives you a list of some tips to help you improve the accounting process of your business.
- Learn about new accounting software
If you’re in the business of providing advice to clients, you may wish to consider using advice software from a financial services licensee as this can help to streamline the preparation of advice reports and documents which are, in some cases, required by law.
There are always continuous learning seminars provided to accountants. You should take advantage of these to learn about the latest and new accounting software. These software updates can speed up your business’ accounting system, as there will be less manual work and computation to be done. At the very least, all manual labor and manual calculation are only done whenever there are any discrepancies, for double checking, or if there may be any errors.
- Focus on building time-saving policies
The main reason why accounting season can be quite daunting is that your accounting department may be behind on some reports and you really have to triple time your efforts to catch up. Or it is only during this accounting season each year that you discover errors or inconsistencies that may take so much time to backtrack. One of the best ways for you to improve your accounting process is to focus on building time-saving policies. For example:
- Offer incentives for employees who are most prompt in meeting financial report deadlines.
- In line with the point above, provide penalties, too, for employees who are consistently behind with their reports.
- Ask for monthly bank reconciliation statements, so that it is easier for you to compile and recheck per month when the yearly accounting season comes.
- Collect your accounts receivable in a more efficient manner
Another aspect of accounting that is continuously at a delay is with the accounts receivable. When you have collectibles from customers, it can be tough to collect payments on time, especially for those who have been constantly at default with their payments. Here are some ways for you to improve your accounts receivable system of collection:
- Remind your client about their amount payable at least a week before its due date.
- If your client defaults in their payment on the due date itself, set a clear grace period for the last day of allowable payments.
If, despite numerous reminders and grace periods given, your client is still continually in default, then it might be beneficial for you to cut off their credit in your company, under what the law provides, of course. There is really no use for you to maintain a client that is not responsible with their payments and is only causing continuous delays for your business.
- Always detail your daily expenses
Whether your business is big or small, most of the daily expenses are usually the same. For example, you have a day dedicated to purchasing specific orders, or receiving certain stocks, or paying certain bills. Hence, it is not difficult for you to make a detail of your daily expenses. Doing this will significantly improve your accounting process, as going through your weekly and monthly records will no longer be time-consuming. The method of accounting always starts with the small, daily logs, and one mistake here makes a mistake in the whole more significant report. The more detailed your daily expenses are, the lesser chances of you creating any irreversible errors later on.
- Make the most out of your human resources
A part of the success of your businesses’ accounting process lies in the hands of your accounting staff. It would be a good idea for you to regularly check your human resources to see if each employee is still productive and happy with their work. You may not realize it, but the emotions of your employees can significantly affect their efficiency. You can be in danger of paying for employees’ salaries even when they are no longer contributing much to the company. Here are some ways for you to leverage your human resource:
- Schedule regular grievance meetings
- Offer free recreational activities or holidays for top performing employees
- Have team building activities
Having a well-developed and up-to-date accounting system for your business involves more than just filing reports and pieces of papers. In here lies one of the most crucial aspects of your business’ success, such as meeting profits after covering all your liabilities. Doing this will help ensure that your business is continuously growing instead of dying down. These tips can greatly help you in improving your business accounting process for this year, and even for the many business years to come.