5 ways to improve financial efficiency
In any SME, accounting and financial administration can swallow up a lot of time. Even if you have your own in-house accounting department, there are so many processes to manage that unless you find the most efficient ways to work, you can soon end up with a backlog – which in turn can put you at risk of non-compliance with your financial reporting and without the information you need to run your business effectively.
The good news is that accounting has changed over recent years, with new technologies and a greater understanding of how to streamline procedures giving businesses more control over this aspect of their operations.
If you’re finding that managing your accounts is becoming a bit of a burden on your time, here are my tips to help reduce the pressure...
5 tips for a more efficient accounting process
- Training – the first way to ensure you’re effectively managing your business accounts is to ensure that the person/people in charge are fully up to speed with both your internal procedures and any financial software you use. Develop your staff by providing training so they understand the processes and can utilise technology resourcefully – especially if you use general office staff rather than experienced accounting experts. Creating a process manual for reference is also useful, especially when recruiting new employees.
- Batch processing and deadlines – entering every invoice or individual piece of data as it lands on your desk is not the most efficient way to work. Consolidate this work into set batches for processing to save time, and make sure that other employees are clear on their submission deadlines – this will ensure you’re ready to create and present accurate data for reporting and tax purposes, and will help you to provide consistent output. It’s worth remembering that missed HMRC deadlines come at a cost, so compliance is key.
- Utilise modern technology – old software and poorly maintained systems are a real time-drain, so make sure you have a modern, fit-for-purpose accounting solution in place. The leaps in accounting technology have been impressive over the last few years, and a new system that makes the process more efficient will soon pay for itself. I personally recommend Xero [LN1] to my clients, for its ease of use, intuitive functionality and sophisticated, integrated tools. Automating your financial admin is the way forward!
- Collaborate and integrate – make sure that all departments understand that they’re there to work together, not in seclusion. Whether through an intranet system, meetings or whatever way works best for you, ensure that communication and a sense of collaboration is instilled in the very fabric of your business – facilitating the agenda of point number two. Also make sure that your software programmes are ‘talking to each other’, not just your physical staff. A good software company will help you to integrate your systems for greater efficiency.
- Outsource your accounting – from hiring a part-time bookkeeper to outsourcing to an accounting firm, or even procuring the services of a freelance financial manager or director, you can often reap both time and cost savings by shipping your accounts out to an external supplier.
While the above points are provided to help improve your accounting processes, they can actually be applied to many different departments within your company. A more efficient business is a more profitable one, after all.
If you need any outsourced support with your business accounts and financials, please feel free to drop me a line and I’ll be happy to answer any questions you have.
[LN1] Link to Xero blog