Bookkeeping is one of the essential parts of accounting, which holds immense significance for every business.
Recording financial transactions in an accurate and timely manner is imperative for businesses. Most of business owners need to stop wasting time in bookkeeping since they have little to no knowledge and expertise in bookkeeping and accounting, which paves the way for errors and delays.
So, let’s get started and figure out some solutions that can minimize bookkeeping flaws and speed up the process. These tips will come in handy whether you are starting a credit repair business or running a flower shop or any other business.
Top 10 Bookkeeping Tips to Save Time
1. Automate Payroll Processing
Every business owner has to go through the tiresome process of payroll. However, the manual approach to payroll processing consumes a lot of time and effort, which can definitely be utilized for business growth. The solution lies in incorporating the use of technology in the form of automation.
The work of dating, printing, signing, etc., can be automated easily and at your end; the only thing you need to do is provide the approval against the payments and the checks will get delivered straight away.
This not only benefits you in terms of accurate and fast payroll records for bookkeeping but also keeps your employees happy with timely salaries and incentives.
2. Eliminate the Paper Approach
Storing financial records on paper is not only time-consuming but also leads to multiple human errors, which has a direct impact on business growth.
Replacing the paper approach with the electronic approach for recording financial transactions not only provides you with data security but also brings down the work overburden of your bookkeeper.
Irrespective of what you want to use your records for, when you have your financial data in the electronic format, you are able to gain access to assess it better and make decisions based on the same wisely.
3. Use Accounting Software
Another great option for reducing the bookkeeping time of your business is the use of accounting software such as QuickBooks. You get to do a lot with your accounting software, like recording debits and deposits, tracking bank accounts, creating reporting data, etc.
Today, businesses are looking to streamline their bookkeeping and accounting processes, and efficient software is the key to achieving the same. The only thing to keep in mind over here is that you should invest in reputable software that also offers the update option to keep pace with the changing financial market trends.
4. Use Cloud for Maintaining the Books
If the electronic format provides you with data security, the cloud offers an additional layer of security. When you maintain your financial records using cloud technology, you are able to gain access to the entire information from any part of the world at any time.
This digital way of replacing manual efforts is preferred by most businesses since it not only brings down bookkeeping time and effort but also provides you with the best flexibility and security when it comes to financial data management.
5. Keep Personal and Business Accounts Separate
Bookkeeping can become really complex if you mix your personal and professional accounts. To keep things simple and reduce bookkeeping efforts and time, one should have two separate savings accounts and credit cards for personal and professional spending.
Also, having an online account access facility is imperative as it not only eliminates the need for going to the bank but also provides you with a quick bank account reconciliation option to ensure the accuracy of your bookkeeping.
6. Spend a few Minutes Daily
The reason most business owners find bookkeeping to be extremely complex is the fact that they wait until the last moment to record their financial transactions in the books. Instead, they should spend a few minutes daily to record their financial transactions.
This lowers the bookkeeping time and complexity and also lets business owners gain valuable insights into their finances, along with adopting efficient strategies for business growth.
7. Manage Business Write-offs in Advance
Write-offs are an essential part of accounting and can significantly benefit businesses during tax season. This makes it a must to manage them in advance as the last month’s hurdle of creating a list for them will only add to the complexity of the taxes.
It is recommended to have a separate list that constitutes of the items you purchased, along with their usage, and keeps it safely in a separate folder.
8. Make a Single Entry for Petty cash
Every business has petty cash in place, which is used for day-to-day expenses. Every business realizes its importance, but only a handful of them keep track of the same, and when they do not, they end up being confused during bookkeeping and tax season.
This wastes a lot of precious time and businesses should make sure they are adding every petty cash entry with the description as a single entry.
9. Automate Invoice Processing for Accounts Payable (AP)
Just as we discussed above, the benefit of automating payroll processing invoice processing for AP too can bring down the bookkeeping time at large. A study by PayStream advisors explains that a lot of manual errors are made during this labor-intensive work of invoice processing and automation eliminates the same.
Another study by Aberdeen revealed that automation brings down the processing time from 20.8 to 3.8 days, the re-issue of vendor checks from 1.9% to 1.8%, and the error rate of vendor invoices from 4.0% to 3.1%. Further discussed are some of the major automation benefits of the AP invoice process, which simplifies the bookkeeping process and reduces the time taken for it:-
- Time Savings: This is one of the best benefits of automation when it comes to reducing bookkeeping time owing to faster invoice processing and approval.
- Transparency and Better Insight: With automation, invoice processing becomes transparent, and bookkeepers gain better insights into it, eliminating confusion and reducing the time eventually.
- Accurate and Streamlined Processing: From capture to payment, 80% of invoices are processed accurately, eliminating overpayment, duplicate payments, and other flags.
- Greater Control, Easy Access, and Real-Time Monitoring: Automation lets you gain access to the present status of the invoice, making the bookkeeping process streamlined and quick.
- Customized Solutions: Versatile and intuitive AP automation software lets you design customized workflows, improve flexibility, reduce complexity, and bring down bookkeeping time.
10. Seek Professional Help
If you are managing your business and bookkeeping on your own, you are not utilizing your time completely. The time you may save on bookkeeping can be used for business growth and streamlining business processes.
When you hire a CPA, you leave the accounting and bookkeeping headache to him and focus on the things that matter the most. This is one of the best ways to save time on bookkeeping and, if you want to save costs as well, consider availing of outsourcing bookkeeping services from a reputed firm like Cogneesol.
Accounting and bookkeeping are directly proportional to the growth of a business, and it is imperative that these processes are streamlined. Though the above-mentioned tips will help you bring down the bookkeeping time, using good bookkeeping software will further minimize your time consumption.
Irrespective of the method you choose to save bookkeeping time as per your needs and budget, it will help you in the overall business growth for sure.
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