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Five ways to simplify your accounting processes

Five ways to simplify your accounting processes

Do you find it challenging to stay on top of your accounting processes? If so, you're not alone. Let’s look at five key ways in which small business owners can simplify and streamline their accounting processes, saving time and money along the way. Matt Jarrott, Insured for Life business owner and Resilium Adviser, shares his tips on how to simplify your accounting processes.

1. Outsourcing your accounting function

One of the biggest challenges facing small business today is a lack of resources. That's where outsourcing can help. By handing over your accounting functions to professionals who understand best practices and are familiar with the latest accounting packages and tools, you don't have to spend days or weeks trying to master it yourself.

In addition to saving time, outsourcing can also save you money. Instead of hiring a full-time or part-time employee to handle your books, you only pay for the services you need. Furthermore, you can relax knowing that all your accounting, invoicing and bills will be handled regardless of how busy you are. By outsourcing your accounting functions, you can free up valuable time and money – both of which will be better spent running your core business.

2. Replacing paper-based systems

Manual accounting processes can be challenging, frustrating and time-consuming for small business owners. The good news is that accounting software and cloud-based accounting systems enable small businesses to work faster and more efficiently by automating repetitive tasks such as paying bills, invoicing and following up on late accounts. These systems also reduce the amount of manual data entry you need to perform by pulling in your bank activity and reconciling your accounts for you.

In particular, cloud-based accounting systems offer many benefits for small business owners and employees. With an integrated cloud-based accounting solution, multiple users can access the data from any location and from any type of device, making manual, paper-based activities a thing of the past. The best accounting systems will have the ability to automatically send invoices, track your income and expenses, and generate financial reports at the touch of a button.

3. Limiting the number of people managing accounts

The double-handling of paperwork and errors due to manual entry both increase the chance of major accounting issues. By limiting the number of people managing accounts, businesses can reduce the risk of introducing human error into their processes. As you reduce the number of people handling your accounting functions, it's important to document processes and procedures to ensure operations can continue to run smoothly at all times.

4. Keeping personal and business accounts separate

Running business expenses through a personal account creates a lot of extra work for everyone involved, from your admin team to your bookkeeper to your accountant. Instead, using a separate bank account and credit card for business-related expenses can help you track your claimable expenses more easily and give you a better understanding of how the business is performing.

In order for this system to work efficiently, it's important to know what you can and can’t run through your business as an expense. If you're unsure about what you can claim, work with your bookkeeper and accountant to identify these items, and set up systems to automatically flag and track these expenses for tax purposes.

5. Maintaining accurate records

Business owners no longer have to turn up to their accountant with a box of receipts to comb through. Instead, accounting software and cloud-based accounting systems can keep track of your invoices and expenses automatically, providing you and your accountant with an easily accessible overview of your financial data. You obviously can't eliminate the human element entirely, but your accounting software can now do the bulk of the heavy lifting.

When it comes to accounting procedures, there's no one right way for every business. While a larger company may choose to keep things in-house, it would be unwise for a small business owner to take on this additional task when they could outsource it instead. And thanks to advances in accounting technology, you have many ways to simplify and streamline your accounting processes.

To learn more about accounting and its processes, find out how to take your accounting processes from sloppy to streamlined

Matt Jarrott is a Resilium Adviser and experienced insurance specialist. Based in Melbourne, Matt runs Infinity Insurance Services, which offers business insurance, and Insured for Life, which specialises in income protection, life, trauma, and TPD insurance.

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