How to Streamline Accounting Processes: 6 Effective Ways

Even the smallest of small businesses have bookkeeping and accounting needs. Small business owners need basic bookkeeping to keep track of income and expenses. It’s essential for filing taxes, but bookkeeping also gives you essential information for making informed business decisions. How are you planning to expand? How many new staff members can you afford? 

Bookkeeping gives you an accurate sense of the inflows and outflows of money in your business. Accounting is about analyzing and evaluating that data to make better choices for your business. It gives you the confidence to make concrete plans for your company’s future. 

These are essential parts of helping your business run, but the workload involved can add up quickly. Many small business owners handle the bookkeeping and accounting process alone, which can increase the chance of mistakes and costly errors. It might also be wasting valuable time that you could be using to focus on your business.

How Much Time Do Small Business Owners Spend on Bookkeeping?

You might not realize just how much time record keeping for small businesses can take up. Your bookkeeper records should include all of your financial transactions from day to day, as well as your longer-term financial documents. 

Effective and reliable business accounting means using double-entry bookkeeping. That means that you record transactions twice, counting each transaction for both debits and credits. This way each time money comes into your company, you know exactly where it’s going. 

Loans and owed payments can be a lot to keep track of as well, and if your business has a lot of these on its books, that will also take some time to follow carefully. Bookkeepers file debts owed to the business under accounts receivable and debts owed by the company under accounts payable. 

If you add up all of these accounting tasks and add the work of making growth projections or producing financial statements for review, it’s easy to see why a small business owner might want to avoid doing some of this work themselves. 

How Can You Streamline the Accounting Process?

Fortunately, you don’t have to muddle through the challenges of bookkeeping alone. Many others have already gone through and made the mistakes you’ve made and more, and you can learn from their experiences.

If you’ve been struggling with the financial management of your business and only starting to figure out the basics of bookkeeping for small businesses, do yourself a favor and take the time required to educate yourself.

With just a little knowledge and some planning, you can set up a streamlined accounting process that will save you time and strengthen your business. Here are effective ways to make  bookkeeping more efficient:

1. Streamline Your Workflow

If you’re going to be doing your bookkeeping yourself, which may still be the most efficient option if your business is small enough, you need to establish a clear, streamlined accounting process to follow.

One way to do this is to centralize your bookkeeping in one simple spreadsheet. You can set up a spreadsheet for either single-entry or double-entry bookkeeping, and then you can compile all your important financial data in one easy-to-follow balance sheet.

Some business owners also use either a spreadsheet or a single paper notebook to keep a thorough record of transactions in journal entries day by day. That kind of meticulous record-keeping is key to good cost accounting. What did you spend and on what?

Whatever you do to keep track of your finances, you need to make the process clear and uniform. You want efficient and accurate record-keeping to be a habit you do almost without thinking.

2. Use Bookkeeping Software

Of course, bookkeeping’s manual process always includes the opportunity for error. The more computerized and automatic steps you can include in your workflow, the more precise and reliable your system will be.

With quality accounting software, you don’t have to do anything but input the data from your transactions into the system. You can find software that will do the rest of the work for you, taking the calculations and reconciliations out of your hands and off your shoulders.

Many accounting software programs can even link directly to your bank account, allowing for quick and reliable cross-checking. And when it comes time to assess your overall financial status or do your taxes, all you have to do is print an income statement.

Without technology like this, cash accounting is always going to be a labor-intensive process with the opportunity for human error. Keeping track of how much liquid cash you have available at any given time can be tricky, but it’s easier with a program doing the math for you.

3. Work with a Bookkeeper

A lot can go wrong if there’s a mistake in your record keeping. You rely on having an accurate picture of the financial data of your business for all of your management accounting. That’s why sometimes it’s worth it to outsource a professional bookkeeper.

If you’re spending all of your time trying to keep the numbers straight, preparing your taxes, or poring over records to catch mistakes, your small business needs an accountant or bookkeeping professional.

That could mean bringing in a new employee or outsourcing to another person or company to handle your finances. It could even mean just bringing in a professional temporarily to help you with streamlining processes to create a more reliable workflow. A specialized professional can do more and produce more accurate accounting data for you in less time.

4. Train and Empower Your Team

Your accounting processes are only as efficient as your team's knowledge and skills. Invest in training programs to empower your team members with the latest accounting techniques and software proficiency. By ensuring that your team is well-equipped, you can create a culture of excellence and efficiency. Encourage ongoing professional development to stay updated with industry trends and best practices.

5. Emphasize Organization and Internal Controls

Organization is the backbone of efficient accounting processes. Establish clear and consistent systems for organizing financial documents, such as invoices, receipts, and purchase orders. Implement internal controls to safeguard against errors and fraud. Regularly review and update your internal control measures to adapt to changing business needs and industry regulations. By maintaining a well-organized and controlled environment, you enhance accuracy, minimize risks, and boost operational efficiency.

6. Leverage Process Automation

In the quest for accounting efficiency, process automation is a game-changer. Identify repetitive tasks that consume valuable time and consider automating them. Accounts payable processes, for example, can be streamlined through automation tools that digitize invoice processing, streamline approval workflows, and facilitate seamless payment scheduling. Automation not only reduces human error but also frees up your team's time to focus on more strategic and value-added activities.

Work with a Bookkeeper

A lot can go wrong if there’s a mistake in your record keeping. You rely on having an accurate picture of the finances of your business for all of your management accounting. That’s why sometimes it’s worth it to outsource a professional bookkeeper. 

If you’re spending all of your time trying to keep the numbers straight, preparing your taxes, or poring over records to catch mistakes, your small business needs an accountant or bookkeeping professional. 

That could mean bringing in a new employee or outsourcing to another person or company to handle your finances. It could even mean just bringing in a professional temporarily to help you set up a more reliable and streamlined workflow. A specialized professional can do more and produce more accurate accounting data for you in less time. 

Planning for Success

Bookkeeping and accounting are foundational pillars for any small business. By keeping accurate track of income and expenses, a business owner ensures a seamless tax filing process, and can also gather insights to make informed and strategic business decisions. However, these accounting tasks can be complex and time-consuming.

This is where 1-800Accountant small business bookkeeping comes into play. With our team of accounting experts, we can take this burden off your shoulders, ensuring your business has accurate and efficient bookkeeping that lets you focus on what you do best – growing your business. Our accounting professionals have vast experience working with small businesses and understand your unique business needs. We can help you establish effective and reliable bookkeeping practices.