Not only can your business ERP accounting software help you to keep track of your company cash flow, but it can also contribute to the profit of your business. It does this by eliminating losses that can occur with missed deadlines. All you have to do is either upgrade your existing computerized accounting system or switch from a manual system to one that is computer operated. This will improve and streamline the bookkeeping part of your business. What are the best practices to improve business accounting?
Here is a look at the top five that will make your accounting system efficient:
1 – Security Inside And Out
In order for an accounting program to work efficiently on a computer, it needs to be protected in many different ways. Not only should all entry sites contain password protection, but for sensitive files such as Payroll and your customer invoicing and credit card information, two-step authentication protocols will offer a tighter grip on the information. Hackers are a creative and brave bunch. The harder you make your system for a hacker to breach, the more likely your data will be protected. Ensure that the computer network, server and any other internet access also has password protection. You may not think there is any value in your accounting data to anyone other than your bookkeeper but that would be wrong. Mailing addresses, phone and email contacts of your clients, suppliers and employees must be protected.
2 – Inventory
Pop Quiz: How do you track your inventory currently? If you close the doors to your business once or twice a year and have all staff on site manually recording your inventory, you need to look at the wonders of new technology. With an effective accounting software program, you will be able to track all inventory so you can see in an instant what you have and what you need through processing reports on the data. By inputting inventory as it arrives, you should always have a clear picture of what is on site. Plus, inventory accounting provides the means to calculate losses from damage or spoilage to sensitive inventory. Without a full understanding of the items you have in stock, you will not be able to know if you can service large orders or not. Using an inventory management tool within an accounting program gives you the answer before you do anything that could jeopardize a sale or order.
3 – Accounts Receivable
One of the best practices to come out of any computerized accounting program is the ability to record and collect payments. If you have a large number of clients, being able to stay on top of what has been paid and what still owes is a massive task if undertaken manually. With computerization, all of these details are bundled together into easy to find and easy to use informational reports. Plus, if you need to get a quick look at the financial health of your business, there is no better way that with an accounting software program.
4 – Accounts Payable
You can’t really have one without the other. As for best practices that improve business accounting, this would be one of the major parts. You can’t track your income and expenses if there is no function within the accounting program that allows you to bill and invoice customers. It also allows you to stay on top of the bills that have to be paid in order to keep your business operational. Thanks to the technology that has become accounting software, you can program – or automate – payments, reminders of upcoming payments and a whole lot more.
5 – Improvements to The Accounting Department
Although these are relatively obvious improvements, you may not see them right away. When you implement a computerized bookkeeping system, you do a number of positive things to both your business and the accounting department in your business. There is little downtime with accounting software as you just need a basic understanding of the math required in order to get the system up and running. Essentially, all you have to do is input the data required. The software takes care of the entire math and other intricate details. This makes your accounting department – and business – run smoother.
- You will be able to track the financial health of your business easily and you will know at all times what your cash flow situation is. The accounting software not only streamlines the entire bookkeeping process, it will also make the task of data collection far easier come tax time.
- You will be able to automate tasks that repeat monthly or more frequently which reduces the possibility of missing invoices or payments.
- Employees can input their time and expenses which assist you in keeping all of those pieces of information intact and available.
- Plus, a computerized bookkeeping system can write checks, provide bank payments and all other tasks expected from an accounting department.
- Workloads are reduced at peak times and provide the information is inputted correctly at first, mistakes and calculation errors are also reduced.
There have been many strides made in recent years to improve business accounting. Very likely the most significant of those was the creation of accounting software programs. Each of these receives updating on a regular basis and usually the changes are the result of feedback from users. That means that although there are some great programs on the market, they still can use some additional work to make them better. In this year, you can expect to see even more changes to the computerized bookkeeping program landscape. The best practices to follow will be to follow what users are saying and creating tools that make the job of accounting much easier than it already has become with these software programs. With so many entrepreneurs in the small business world, more innovation from their perspective can improve the already comprehensive selection of options already built into this kind of software.