Accounting is a critical part of running any business. It’s also one of the most challenging aspects of a business, but it doesn’t have to be that way. With appropriate systems in place, you can ensure your company stays on top of its financials while freeing up time for other tasks.
There are various software programs you can adopt for ease of your operations. These programs allow big and small accounting businesses to streamline and automate tasks, helping them improve their performance significantly. With the vast options in the market, the best small business accounting software will depend on your specific needs.
6 Tips And Practices of Automation For Accounting Businesses
With that said, here are six tips that will help you further polish the automation process in your business.
- Automate Your Accounts Payable Process
Automating your accounts payable process is a great way to save time, reduce costs, and improve efficiency in your business. To achieve this, you must have an account payable software solution that aligns with your financial goals.
Once the software is installed and set up correctly, below are the steps you can take to automate your accounts payable process:
- Set up a workflow for each vendor. Doing this will help ensure that all necessary approvals are given before payment is made and that there’s no delay when invoices are approved and when payments are issued.
- Set up a payment approval process with multiple levels of approval depending on how much money is being paid out by your company. For instance, if one invoice comes in for USD$500 or less it may not require Board approval, but anything over USD$5000 would need approval from the Executive Team before being sent through for payment processing (if this isn’t already done automatically).
- Create reminders so that employees have time to review invoices before their due date and not forget about them. Otherwise, they might bounce checks at awkward times, such as during month-end closing.
- Invest In Data Security
Although automating your business processes brings many advantages, it may also make you vulnerable to data breaches, disaster situations, or cyber-attacks. So it’s important to take serious steps to protect your business. Here are some tips:
- Use a secure cloud solution (such as Dropbox Business).
- Use a password manager (such as 1Password) to generate and store all of your passwords.
- Restrict access to accounts.
- Use secure devices.
- Organize Documents
When it comes to organizing documents, there are two things you should keep in mind. The first is to organize documents by client, project, and task. The second is to use a filing system that’s easy to maintain.
Many accounting businesses have a client base that changes over time. You may only have one or two clients at any given point in time but the overall number of clients can be quite large since each client has multiple projects and tasks associated with them. If you don’t know who your current clients are or what projects they have on track all the time, this could spell disaster if something goes wrong with one of those accounts.
To prevent that from happening, use software that allows you to organize your documents based on client name (or company name), project name, and task type (e-mail messages about upcoming deadlines would be considered tasks).
- Automate Your Payroll Processing
Payroll processing is one of the most time-consuming and tedious aspects of running a business. It’s easy to see why automating this process can be so valuable for your accounting firm. Having less manual work in your operations can free up more time for other tasks and allow you to focus on growing your business.
Automating payroll also has great financial benefits, including saving money by reducing errors, saving time by eliminating administrative tasks, and saving stress from dealing with late payments or payroll taxes.
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The first step in automating your payroll is choosing a system that is suitable for you. There are various systems available on the market today: some are cloud-based, others not; some are more expensive than others; some are designed specifically for small businesses, while others are designed specifically for larger enterprises (such as large corporations).
The key here is finding a system that fits your budget and skill set.
- Allow Cloud Access For Your Employees
There are many benefits of cloud accounting software. It’s easy to use and always up to date with the latest updates. Cloud accounting software, such as Xero or QuickBooks Online, can be accessed from anywhere without needing expensive hardware or software.
It makes it a good option for businesses with employees working remotely or in different locations across the country or the world.
- Embrace Automated Reporting Tools
Automated reporting tools are handy for various professionals, from accounting specialists to business owners and managers.
Automated reporting tools can help you:
• Automate the process of generating financial statements and other reports. They allow you to create reports daily, weekly, or monthly with just a click of a button. These automated tools can also help you generate more accurate reports by eliminating human error during the data entry process.
• Provide real-time insights into your company’s financial health by providing access to information at any time through an online portal or app on your mobile device.
• Generate financial statements under GAAP (Generally Accepted Accounting Principles), which guarantees that all companies follow the same rules when calculating their profits and losses. It, therefore, makes it easier for investors and lenders to compare them with each other across industries or even countries.
Automating your accounting processes is a smart business decision. With so many things to keep track of and so little time to do it, using software is a great way to go about it. With this, you will be able to focus more on other aspects of running an effective business since the software will take care of all the tedious tasks. Automation tools can help you manage data, employees, payroll, and so much more.