How to Streamline Your Business’s Accounting Processes

10 min read

April 2nd, 2024

Many small business owners spend too much time and money on back-office processes. In small and medium-sized businesses, owners tend to rely on manual processes. Plus, they often take on the daily bookkeeping and accounting tasks themselves or spend too much on hiring in-house professionals to manage their back-office processes.

Instead, business owners should invest in streamlining their bookkeeping and accounting processes with innovative business accounting automation solutions that combine an outsourced team with advanced tools and technology for more successful financial management overall. 

Why Bother? The Benefits of Streamlining Your Accounting Processes

Streamlining your bookkeeping and accounting processes can take some effort and might require you to get out of your back-office, envelope-opening, check-writing comfort zone, but it's worth it! Businesses with better back-office processes enjoy numerous benefits of automation, consolidation, integrations, and smoother workflows, many of which will show up in your bottom line.

Accounting process improvement:

• Reduces Errors - Automated processes reduce the opportunities for human errors to occur. As a result, business owners enjoy more accurate financial data and fewer compliance exceptions. 
• Saves Time - Automated, streamlined processes eliminate manual processes that can be redundant, clunky, and time-intensive. As a result, you (and your employees) are free to focus on higher-value tasks. 
• Saves Money - Less time working on manual processes means more time spent focusing on the core function of the business. As a result, you save money on every bill paid, invoice sent, financial report generated, account reconciled, month-end closed, and every other manual accounting process that can be automated. 
• Improves Compliance - Fewer errors and automatic system updates help to ensure that your business is always operating compliantly with back-office processes, tax preparation, and reporting keeping current with the latest rules and regulations. 
• Reduces Risk - Automating and streamlining accounting processes also strengthens your back-office system by improving access controls, increasing checks and balances, and reducing vulnerabilities to internal fraud. 
• Increases Productivity - Streamlined accounting workflows increase efficiency by eliminating mundane, repetitive tasks. This frees up employee time and increases productivity. Additionally, better accounting systems help you identify areas where operations can be optimized to further improve productivity. 
• Improves Data-Driven Decision-Making - A streamlined, automated, integrated, and consolidated bookkeeping and accounting system improves data accuracy and reliability. It can also provide business owners with access to real-time financial data for timely reports available anytime you need them. This means you can base every decision on your financial data for improved strategy and leadership in every aspect of your company. 

A Step-by-Step Guide to Streamlining Accounting Workflows

So, how exactly do you go about automating, consolidating, and integrating processes to streamline your bookkeeping and accounting department?

Step 1: Evaluate Your Current System, Tools, and Technology

To begin improving your accounting processes, you must first define and document your current system.

• Start by making a list of every current bookkeeping and accounting task that you and your team perform (bank reconciliation, billing and invoicing, accounts payable, expense recording and categorization, budgeting, reporting, etc). 
• For each task, create a flowchart that outlines the steps in the process, which employees are responsible for what, and the tools used such as accounting software, spreadsheets, or other applications. 
• Next, make note of any spots in the process that waste time, are inefficient, or result in frequent errors, confusion, or workflow bottlenecks. These steps might include manual data entry points, redundancies, or lengthy approval waiting times. 

Any team members responsible for or involved in any part of these processes should be included in this discussion and list-making activity. They will be able to provide you with valuable insights regarding the parts of the system that currently aren't working or aren't working efficiently. They can also help you see which processes are currently working best, and this can help you prioritize the process of streamlining and automating. 

Read More: How EOS Transforms Your Business for Success

Step 2: Define Standard Operating Procedures

Standardizing your workflow with standard operating procedures (SOPs) will help to ensure that everything that needs to be accomplished will always be accomplished (and in the right way). This will improve compliance and efficiency, ensuring that your financial records are based on a consistent system of data collection, categorization, and reporting. 

Write down SOPs for all of your bookkeeping and accounting tasks (such as accounts payable, accounts receivable, month-end closing, year-end closing, and tax preparation). Explain every step of the process and use checklists to ensure nothing is overlooked.

Additionally, create a schedule that includes each task and shows when they should be started and when they need to be completed. This schedule can also assign the tasks that need to be completed so that everyone knows who is responsible for what. 

Step 3: Choose the Right Accounting Software

Once your tasks, processes, and workflows are well-defined, you can begin looking for opportunities to automate these tasks with technology. The first and biggest decision to make is choosing accounting software for your business. When comparing accounting software options, business owners should consider several factors in weighing the decision, such as budget, needs, features, industry-specific customizations, available integrations, customer support, and scalability.

Additionally, it's important to consider how your back office will be managed and operated going forward. If you and an in-house team are primarily responsible for these tasks, you will want to select a product that offers good customer support while also being user-friendly so you feel comfortable navigating it and using its tools. If you will be outsourcing your back office to a third-party, expert provider, then you should consider the tools and technology recommended by the provider. Doing so can help to maximize these types of collaborations and optimize communication. Additionally, if you're going to outsource, don't shy away from more complex, robust products because an outside expert will be able to help you leverage these systems to your business's advantage. 

Read More:  The Pros and Cons of Accrual Accounting for Your Business

Overall, it's important to choose affordable, user-friendly accounting software that meets your needs and integrates with useful applications to automate as many manual processes as possible. Plus, you should select a flexible solution that will be able to grow and change along with your business. 

Step 4: Boot up Your Day-to-Day Operations

After choosing accounting software, start the implementation process by first using it to power your daily tasks and operations. Get used to navigating and manipulating your digital dashboards for time-tracking, expense reporting, bill payment, invoicing, account reconciliation, and financial reporting. 

Step 5: Integrate Department-Wide Technology

Once you've comfortably transitioned to automating your daily tasks, you can explore your accounting software's integration capabilities to expand data collection and reporting to support business-wide management, analysis, and strategy. Paired with fully integrated applications, basic accounting software can be transformed into a fully functional enterprise resource management system. 

Step 6: Train Your Team

Throughout every step of the workflow streamlining process, you will need to invest in training your team. Having tools and technology available is a complete waste of money if your team doesn't know how to use them. When you implement new software or invest in a new tool, identify the employees who will need to know how to use the tool and schedule time for them to be trained in using the software and leveraging the tools now available to them. 

Step 7: Continuously Revise and Improve

Throughout the process, you should welcome feedback from your employees while also keeping a close eye on key operating and productivity metrics to measure the impact of your newly streamlined bookkeeping and accounting workflow. As you continue to learn more about these processes, how your business operates, and how your company's profit drivers work, you should revise and adjust your processes for continuous improvement that supports increased efficiency, productivity, and profits. 

Make it Happen: Outsourced Accounting Support to Maximize Small Business Bookkeeping Efficiency

If you feel overwhelmed by the idea of streamlining the accounting processes in your business, you're not alone. It's a big task for a business owner without extensive expertise in the accounting industry to tackle on their own. The perfect solution for small and medium-sized businesses is outsourced accounting with a reputable partner who is experienced in your industry. 

GrowthForce's outsourced bookkeeping and accounting services provide business owners access to a financial team that can implement the tools and technology needed to streamline their back offices — at a fraction of the cost of in-house employees. We help you define and implement financial management best practices while establishing sound, high-functioning financial management systems. Plus, we teach you how to use and leverage these new systems for better business management, operations, and strategy. With a fully streamlined and automated back office, business owners can increase efficiency and productivity, optimize growth, and maximize profits for a more successful future.