There’s no better time to celebrate than when your business reaches a new milestone. But like anything good, progress comes at a cost. As your business grows, so does the volume and complexity of certain processes, such as those carried out in your financial department.
This can force you and your employees to waste valuable time on repetitive, menial processes where instead you could be focusing on more productive tasks. This is why every entrepreneur should take a moment to identify how they can streamline their accounting. Like if your business is in the IT industry, you should consider hiring it contractor accountants as they understand how your business should be run in a legally tax-efficient way.
With a bit of knowledge and some help from technology, you can significantly reduce the amount of time required to effectively manage your money. Paying more attention to your finances can also help you discover new ways to spend less and earn more. Want to know how? Here are 5 ways to streamline your small business’s accounting.
Allocate Time Strategically
Most businesses are cyclical, with a busy time of the year and a quieter period. During more prosperous seasons, pressure to achieve results makes it easy to fall behind with upkeep of financial data.
Consequently, your quiet period is spent resolving issues and catching up on admin tasks. To avoid this, dedicate appropriate time slots to ensuring your finances are up to date and error-free.
Stay in Touch with Your Accountant
If your accountant also handles your taxes, you should frequently contact them and enquire about opportunities to mitigate your tax liability. This is particularly useful before starting a new project, as your accountant can tell you whether you qualify for tax relief. Remember to ask whether you can claim immediately or at the end of the year.
Utilize a Powerful Accounting Tool
Modern accounting software is capable of bringing the bulk of your financial operations together onto a single, powerful platform that provides valuable insights into how you can better manage your money. Today’s solutions are predominantly cloud-based, making them more efficient, affordable, accessible and user-friendly.
Most software options also offer a variety of automation features, thus eliminating repetitive and time-consuming tasks from your daily schedule. Popular small business accounting tools include QuickBooks and FreshBooks, which have been compared by PieSync in their comprehensive review. Check it out to find the best solution for your business.
Categorize Income and Expenses
A simple way to reduce the amount of time spent on entering, tracking and analyzing financial data is to categorize your sources of revenue and expenditure. This will make tasks such as filing taxes and collating invoices much easier.
Improve the Human Element
All your shiny accounting tech is of little value if your employees don’t know how to use it. Staff members should be well-informed on how to effectively utilize newly-introduced technologies.
You should also emphasize the importance of submitting full and accurate information in a timely manner, with repercussions for those who lag behind. This will reduce the amount of time wasted on rectifying human errors. Focusing on maintaining the accuracy and quality of your financial data is key to effective accounting. Finding new ways to digitize, automate or otherwise improve daily processes is just as helpful.
