Is your financial record keeping taking too much time?
Whether you complete your financial record keeping yourself or have a finance team, technology provides some great opportunities to make this task more efficient.
Here are our top tips for reducing the headaches caused by financial record keeping:
1. Bank feeds
Bank feeds download transactions through your online banking, so you don't have to manually enter them. The transactions appear every morning and then it's simply a case of allocating the transaction to the right heading or invoice. Read more about cloud-based accounting systems.
2. Invoice Scanning
Although more and more businesses are issuing their invoices electronically, many are still sent out as hard copies. If you have a scanner then you can scan invoices into software such as AutoEntry to identify the supplier and amounts from the scanned image. This enters the information and also links an image of the invoice to the transaction in your software for future reference. This system also provides an email address so electronic invoices can be sent into the same location with everything in one place.
3. Rules
All businesses have recurring amounts which they pay every month or quarter to the same suppliers. The amounts may vary, but the treatment of these transactions is always the same e.g. BT bills will always be posted to telephone costs with 20% VAT applicable. Most cloud accounting systems include the facility to set up rules such as, if there's a payment to BT then claim 20% VAT and post the net amount to telephone costs. Once these are set up you never need to post another payment to BT again! This also ensures that your accounts are consistent and free from errors.
4. Chart of accounts
Ensuring your chart of accounts (the headings you see in your profit and loss account, and balance sheet) is streamlined, whilst still providing sufficient detail, is a difficult balance to strike. If you have too many headings, you won't remember where to allocate transactions or they will be misallocated. This leads to additional time correcting errors. We have a chart of accounts for different business sectors and can archive any headings you won't need.
5. Bank details
Ensure the bank details for all of your suppliers are recorded on your accounting system. Most systems will allow you to perform a pay-run directly from the software - sending directly to the bank for payment. This saves re-keying of information through your bank portal.
6. Debt Collection
Depending upon the size of your business, credit control can be a job in its own right. You can reduce this burden by being systematic in your credit control process. Ensure you have email addresses for all customers, ensure your bank details are supplied on invoices, issue statements at set intervals, chase debts outside of your credit terms with individual letters and ultimately follow up with legal action. Most accounting systems have a facility to issue some of these steps via email across all customers with outstanding debts. For a more sophisticated solution, take a look at our app ecosystem.
7. Integration with other systems
Many businesses have a piece of software they use for their day to day operations, for example, a booking system for a hotel or a website sales system. Integrating this with your financial system means this data is transferred automatically, is free from human error and saves a significant amount of time.
8. Dashboards
Having a "dashboard" of live KPIs and financial headlines helps business owners focus on what is important and take immediate action where necessary, limiting the extent of emerging issues before they grow. Most cloud systems have customisable dashboards to do just that, allowing business owners to focus on what is important for the future of their company.
9. Outsource
We can perform all or part of your finance functions for your business. You may be surprised by how competitively priced this appears when compared with the salary cost of employing someone, this is because we implement all the points described above. There are lots of reasons to consider outsourcing, read our 8 reasons to outsource your finance function article to find out more.
If you want to discuss your current accounting system and how you can improve efficiency to save you time then please contact us.
We offer a review of your accounting systems and more details can be found here.