Small businesses often have leaner budgets and smaller teams. Operating a full-fledged accounting team is challenging when working with limited resources. You might find that you spend a lot of time combing through invoices, receipts, or unreconciled transactions, especially when it is time to do your taxes or get ready for an audit.
Keeping track of your financial records can be a challenge. However, you can save time and money by streamlining your accounting procedures while ensuring that your financial records are always in order.
Whether you are a new business or have worked at it for years, staying on top of your books is essential. However, if you find it challenging to navigate your accounting, it might be time to simplify some of the processes to fit the needs of your business. We’ll go over the benefits of a good accounting system and provide you with some tips to help you simplify it!
The benefits of a good accounting system
An accounting system is necessary for businesses of any size. Whether you keep your accounting function in-house or outsource it to your bookkeeper or CPA, a solid accounting system will create a good foundation for your business finances.
Your business requires your time and attention. When you automate accounting processes such as invoicing and payments, you can free up your time to focus on the operations of your business.
Reduce errors and increase efficiency
A good accounting system or software can also help you save money by reducing human error and increasing efficiency. Human errors and mistakes can happen no matter how careful we are. An accounting system that works well can help you catch errors quickly.
When your accounting system works and your books are up to date, it is simple to understand your business’s finances. Then, if you want, you’ll be able to get real-time reports to plan for your cash needs or tweak your operations based on the latest information.
Seven ways to simplify your small business accounting
Keep accurate records.
An essential aspect of accounting is keeping accurate records. Good records include a history of all income and expenses and consistently recording all financial transactions. There can be a lot of transactions for your business, and recording them can be time-consuming and challenging. When you have accurate records, your books are always in order. You can get the information you need to make the right business decisions.
Document your policies and procedures
When you have written procedures, it takes the guesswork out of accounting. It can seem time-consuming to document your process at first, but it will help to ensure that your accounting process is as efficient and effective as possible.
Be sure to document how you handle income and expenses and keep track of financial transactions. Knowing your accounting workflow will help you save time and simplify your accounting function.
Once your accounting policies are documented, communicate them with your in-house or outsourced accounting team.
Use accounting software.
Accounting software can help you automate many tasks such as invoicing, tracking expenses, and preparing financial reports. Several options are available on the market today, depending on your business’ needs.
The best accounting software for your business should be secure, fit your budget, and be easy to use for you and your team. Be sure to research the options available or consult with your accountant for recommendations that fit your demands. They can even help set up the software for your business and teach your team to use it.
Automate as many tasks as possible
Another great way to simplify your accounting process is to automate as many tasks as possible. Many small businesses use digital solutions such as cloud-based software to automate the various accounting tasks in their business.
Some tasks to consider automating include:
- sending invoices to customers
- sending payment approvals to appropriate personnel
- batching payments
- tracking inventory and keeping it updated in real-time
- reconciling bank statements
Automating these tasks can save hassle and time, freeing up your schedule for other critical business functions.
Operate a separate bank account for your business
Keeping your personal and business finances separate to maintain accurate records is vital. When they are distinct, it simplifies the work for you and your accounting team.
One way to do this is to operate a separate bank account for your business. You can easily track your expenses and income and maintain better records for tax purposes.
Review your books monthly
Reviewing your financial records regularly will help you catch mistakes and identify areas where you can save money or improve business operations. Set aside time each month to check your records and make necessary changes.
If your bookkeeping is up to date and accounts are reconciled, you can get live updates on your business’ finances. When your books are up to date, they can help you make relevant financial decisions promptly.
Find a good accountant.
While you can do much of your accounting work yourself or with a team in-house, it may be beneficial to consult with an accountant. A trusted accountant can help ensure that your financial records are accurate, compliant and up-to-date.
Your accountant can provide valuable insights on how you can improve your accounting processes, along with advice on tax planning and other financial matters.
Make accounting a breeze.
Businesses of all sizes need to maintain accurate financial records. By simplifying your accounting procedures using accounting software, automating as many tasks as possible, and keeping good records, you can make the accounting process much simpler and less time-consuming.
Additionally, you can ensure that your finances are always in order by documenting your processes and setting aside time to review your books each month. If you need additional help or support for your accounting function, consider consulting with an accountant to get the most out of your accounting process.
Contact Glenn Graydon Wright LLP in Oakville for Experienced Accounting Advice
Talk to a skilled accounting professional to find more ways to save time on your accounting needs. At Glenn Graydon Wright LLP, our team of financial experts will provide you with recommendations on how to simplify your accounting function and can even provide you with services to support your accounting team. To learn more about how Glenn Graydon Wright LLP can provide you with the best accounting expertise, call us at 905-845-6633 or connect with us online to set up an initial consultation.