Keeping on top of the books is an important task for any business owner. But that doesn’t mean it’s easy. Bookkeeping, though essential, is time-consuming and detracts from work that makes the business money — so how can these processes be more efficient?
First, let’s tackle the elephant in the room: bookkeeping vs accounting. Bookkeeping is the recording of business transactions to paint a picture of the present, while accounting uses this information to take a forward and backward look at the business.
Not to be confused with the latter, bookkeeping may sound tedious and long-winded, but it remains an essential part of business management. And in today’s digital world, many tools and approaches exist to help make the process more efficient.
In this article, we explore the following ways you can improve the bookkeeping process:
- Hire a quality bookkeeper
- Practice paperless bookkeeping
- Keep up to date with industry trends/changes
Read on and learn how to make your company’s bookkeeping processes more efficient.
Hire a quality bookkeeper
The first step for efficient bookkeeping is to hire a quality bookkeeper — a simple recommendation that often goes ignored. After all, many business owners, particularly ones in smaller companies, tend to handle bookkeeping duties all on their own.
This is because small companies and startups often don’t have the capital to afford more hires. But if your company is growing and you’re tight on time, hiring a bookkeeper is a good investment. Why? Well, it’s important your finances are in order and processed correctly so accountants (private or internal) can properly analyse the data.
Finding a quality bookkeeper can prove difficult, so here are some quick tips to help you through the process:
- Cross-reference and check the proposed bookkeeper’s past work
- Contact referees and make sure you have the right person for the job
- Liaise with your accountant about the proposed bookkeeper
It also helps if your bookkeeper uses, or is otherwise well-versed in, the same software as your accountant. Some examples might include FreshBooks, Sage, and Wave. Either way, this makes it easier (and more efficient) to share information and get the job done.
Practice paperless bookkeeping
Demand for paperless processes extends into bookkeeping too. This is not only for the clear environmental benefits but also for a boost in operational efficiency. After all, relying on paper is messy and time-consuming. Nowadays it makes far more sense to go paperless and handle bookkeeping duties online.
There are many ways you can adopt a more paperless approach to bookkeeping — but why should you? Here are some efficiency benefits for why your company should practice paperless bookkeeping, as well as some tools to help you out:
- Claiming back expenses is easier: lots of online payment services are HMRC compliant. For example, businesses reliant on vehicles can use fuel cards to claim back expenses more easily (you can find options at iCompario). These tools upload HMRC compliant invoices to a bespoke account you can access through an app.
- Access is streamlined: typical admin tasks like checking and recording information are more streamlined with cloud storage. Popular examples of this tech, like Google Drive and DropBox allow bookkeepers to access data from remote locations with any device that has access to the internet.
- Payroll is more secure: online payroll services such as BrightPay are password protected and encrypt your data, making highly sensitive information more secure.
Sophisticated tools are making paperless bookkeeping more efficient (and secure) than ever before. Plus, these online tools are affordable, meaning all businesses, big and small, can enjoy the benefits.
Stay up to date with industry trends/changes
Knowledge is a powerful commodity in the world of business. And it pays to be well informed, particularly in an ever-changing environment like bookkeeping. After all, there is a lot to keep in mind, such as:
- New laws
- Pay alterations
- Tax implications
Even if you’re not the designated bookkeeper, as an owner it’s essential to keep up to date with the finances of your business. For instance, poor pay management reflects badly on your brand, and paying an employee incorrectly can likely result in harsh penalties.
But how can you stay up to date? Well, there are plenty of resources to help you out. We recommend signing up for updates from HMRC — this way you get information directly from the horse’s mouth. Moreover, your bookkeeper, given the importance of their role, should always be aware of industry happenings and ready to implement changes.
While bookkeeping often feels like a time-consuming and laborious process, with the right approach this mandatory task can be a breeze. From hiring a quality bookkeeper and going paperless to staying updated on industry changes — this is how to make your company’s bookkeeping process more efficient.
