The accounting department, the controller’s position and the CFO will be around for a while, whether we like them.
It’s great news for accountants. Many executives are at odds, even with the people they hired to fill this role. A lack of accounting systems and tracking money can slow down essential purchases and even cause businesses to fail.
Since the accounting team is here to stay and will continue to perform its functions, we should make it more efficient, productive and conducive to the business’s success.
1. Reconciliation should be done promptly
You may not need to reconcile your accounts payables and receivables to your financial statements and balance sheet. But, if you do it a little bit each month, it will make the process much simpler. It sounds terrible to reconcile at the end of the fiscal year.
2. Stick to your cutoff policy
This tip has been mentioned before. It’s essential to set up a system with rules and deadlines for invoices, reimbursements etc. And enforce them. Accounting processes are driven by business rules, which must be followed.
3. It is an excellent use to do research
Accounting is a field where reading an hour or more on the job can be difficult, but it’s essential. Best practices, laws, and tax forms and rules are constantly changing.
4. Pay your taxes. Really
It’s not something anyone wants to hear, but it has to be said. The IRS, state and local laws require that taxes be paid promptly, on time or early. It will save you from extra charges, penalties and the headaches of an audit that goes wrong.
5. Take advantage of the opportunity
Many accounting departments commit this significant error. Accounting departments do a lot of predictable, cyclical or recurrent work. It is a mindset that works on a path and never challenges it, which leads to missed opportunities for cost reduction and improvement in the department.
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6. Aligning reporting with accounting
Any business needs to take this step. Create reports for different departments and executives in your accounting department and filing and tax preparation. It is essential to have a standardized reporting system and data management to avoid duplication of work due to software or formatting issues.
7. Accounting in the Cloud
It allows you to access information in any location. A centralized hub for data can also be made available by your department to executives and other disconnected databases, which may rely upon manual entry or duplication.
8. Accounting is about more than just compliance
Accounting is more than just tax compliance. It helps you run your company smoothly. Accounting and financial data can generate insights into business and help shape strategic initiatives. For example, you select the marketing strategy with the best financial result.
9. Pay their balances before clients getaway
Receivables are a curse. You may like a high receivables number, but you cannot buy new materials or invest in technology with a promise. So keep your clients from doing this. Refuse to accept future orders once you have cleared your previous accounts.
10. Calculate the minimum monthly profit
Businesses often need to remember this. It is expected that annual budgets and current statements will be available. However, it isn’t easy to know how your company is doing without solid metrics and goals to predict what will happen next. Giving this information to the accounting department as a conclusion from your data can be helpful too. “We needed at least $____ gross profit margin for the past three months. If we continue, we’ll still need that.” Accounting department heads must be clear about the realistic goals executives set.
Never stop improving
This list is incomplete. You can improve your accounting team’s efficiency by making countless process tweaks. Why not start with these ten and then explore the exponential opportunities for process improvement that accounting automation provides?