Consider these bookkeeping practices to improve operational efficiency, maintain business organization and prevent errors.
Whether you’ve been running your small business for years or are just opening up shop, efficient operations are the key to business success. When it comes to bookkeeping, it’s vital you run a smooth operation that gives you timely, reliable results. Bookkeeping tasks include setting up accounts, entering transaction data, generating reports and preparing tax returns. It is the key part of your accounting system, including invoicing, bill payment, banking, inventory management, and payroll. We’ve assembled here a short prescription for streamlining your bookkeeping process and have included a list of bookkeeping tools to boost your efficiency.
Five Keys to Efficient Bookkeeping
Even minor improvements can have a major impact on your business’ efficiency. Here are five:
1. Establish or review your system:
If you are just now organizing your business, you will need to have a detailed bookkeeping system in place from the very start. It starts with basic tasks, such as entering your receivables and payables as soon as you can — don’t let invoices or checks pile up on a desk, as it’s all too easy for something to fall through the cracks. Review your chart of accounts to ensure it’s properly set up and capturing all the information you need. Establish training materials in case you change bookkeepers, as this will save much time should the need arise.
2. Maintain your pace:
As we just touched upon, you should never fall behind on your bookkeeping. Even a delay of a few days can snowball into bigger problems. Errors often occur when you have to play catch-up. For example, your inventory system might fail to reflect orders placed if you haven’t yet entered the data into the system. It’s wise to have at least one “backup” bookkeeper who can step in when the primary one is away.
3. Contract with a CPA:
You probably don’t need a full-time CPA on staff, but that shouldn’t stop you from hiring one as a part-time consultant. CPAs can ensure your books are being kept correctly. You’ll probably have the CPA prepare your tax returns and answer any questions that come up. And in a pinch, your CPA can temporarily maintain your books if you need to find a new bookkeeper.
4. Keep receipts:
It’s such a cliché, but nonetheless true. If you don’t keep, organize, and record your receipts, your business will likely slow down as you search for purchase information from weeks or months before. Consider digitizing each receipt, and in any event, set up a filing system that ensures you can find a receipt when you need it.
5. Use the best tools:
It goes without saying that, in 2019, very few businesses are run using a paper-based accounting system. Since everyone automates, it makes sense to choose the systems and tools that have impressed the experts and other users. Don’t worry, you don’t have to pay thousands to get a basic accounting package. In fact, some good ones are free! Keep reading to see some expert recommendations.
Tools for Efficient Bookkeeping
The most valuable business tool is your accounting system. If you are a small company, consider getting a modular system with separate packages for basic bookkeeping, invoicing, inventory, payroll and so forth. Here are some noteworthy systems to consider:
This is a top-rated free accounting system with more than 1.5 million users around the world. It’s a cloud-based system accessible anywhere you can establish an internet connection. It has impressive functionality, including invoicing, receipt management and banking. The only cost is a processing fee for online payments.
2. Sage Accounting:
Perfect for self-employed business owners who need a simple system that can be upgraded as your business grows. Prices start as low as $10/month.
A powerful accounting system that integrates most accounting features and interfaces with popular CRM and customer service apps. Prices start at $19.95 per month.
Many other accounting systems also perform well, including QuickBooks Online, Xero, Sage 300 Cloud and Sighted. If you need a payroll package, consider WagePoint, Gusto and SurePayroll. For tracking time and expenses, look at TSheets, Expensify and Neat.
Take the time to get your bookkeeping right from the start and you’ll save countless hours on error correction and rework. Your business will save money and you’ll have one less thing to worry about.
Santander Bank does not make any claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in this article. Readers should consult their own attorneys or other tax advisors regarding any financial or tax strategies mentioned in this article. These materials are for informational purposes only and do not necessarily reflect the views or endorsement of Santander Bank.
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