Financial professionals are under significant pressure to work faster and deal with more complex data while ensuring they keep costs at a minimal. They don’t just spend all their time gathering and reconciling data, there is a lot more that accountants can do to improve the financial performance of a business.

Accounting is a process that records transactions and maintains a chart of accounts. However, it can help with strategy and management. Business owners of both small and large enterprises need to focus on improving their accounting processes to ensure their current ratios and cash flow are favorable.

It is vital that business owners utilize quality accounting standards to ensure they’re making the most of their resources. Every successful business owner knows that accounting professionals play a huge role when it comes to improving business performance. So, if you’re looking for bookkeeping strategies that managing accountants and auditors suggest, you have come to the right place. Here’s everything you need to know.

1. Centralize and Streamline General Accounting Processes

One of the bookkeeping strategies that you and your employees need to consider implementing is centralizing and streamlining the general accounting processes. The fact is that the way an organization is structured to deliver accounting processes and accounting functions, is integral to successful financial management. It is the only way that a business can support all of its needs and those of its clients. By combining repetitive or common processes into a single location and across all departments, you will create a shared services center.

Since less than 20% of businesses leverage shared services, it will allow you to gain a competitive edge over other players. Besides, you will get to enjoy several benefits, such as fewer errors and a much faster cycle time. In fact, opting for a shared services center will allow you to meet all your goals and enable your business to get more things done. Moreover, you’ll complete more work in less time. Hence, you don’t want to overlook this bookkeeping strategy.

2. Encourage Strong Data Governance

Another excellent bookkeeping strategy worth looking at is the implementation of strong data governance policies. It is incredibly important to ensure clean and consistent data when it comes to general accounting. It is the only way that you can generate the right financial statements and financial reports, and get an accurate representation of the organization itself. It includes financial data and a chart of accounts.

By ensuring proper data governance, there is no limit to what you can achieve. Implementing a standard policy will ensure that you are able to get more done. Organizations that implement finance data definitions have an easier time reporting and meet all their KPIs compared to organizations that fail to do so. Moreover, you will get to perform much better as the possibility of making errors would be significantly reduced. You will also encourage better customer satisfaction and trust, strong compliance, and overall financial health.

3. Standardize Accounting Processes and Assign Process Ownership

If you want to improve the accuracy of your accounting records, including accounts receivables and the cash register, you have to standardize accounting processes and assign process ownership to specific employees or to certain members of your accounting team. Process standardization is critical to performance. It is actually considered a prerequisite for successful automation. Furthermore, end-to-end process management relies on shared services implementation.

When you standardize the accounting processes, you will be able to achieve common finance processes which are integral for adherence to process ownership. This has an overall positive affect on performance management, a better grasp of sales revenue, and streamlines the managerial accounting process. This means that you will have an easier time managing finances and identifying areas where you need to improve.

Leveraging process owners and process standardization pays off in the long run. You’ll improve communication between team members, make the most of varied capabilities, and smooth out any rough or incongruent aspects within your accounting process.

4. Striving Towards a Continuous Close

A notable bookkeeping strategy that you should consider is performing a continuous close and striving towards pre-close activities. Since the month-end close can be a frenzy of activity, you would have no option but to ask the accounting team to work overtime for which you would have to spend a great deal more money which may carry a negative impact on your financial condition. This is why you need to focus on ensuring a continuous close. It will allow the department to collect and analyze information on time. Besides, it can be quite stressful for your and your employees to take on the work at the last minute.

If you look closely at a leading organization, you will come to understand that working toward a continuous close is likely to even out all the work so that everything is completed by the month-end without delay. It is the only way that you can prevent your accountants or bookkeepers from working overtime. You should consider using cloud technology and automation to implement continuous accounting. It would allow financial data to be accessed in real-time.

Even when you perform some pre-close activities, it will become a lot easier to get everything done on time. This would prevent the likelihood of mistakes. You can rely on these activities to lower the cost of general accounting processes as well. Therefore, you don’t have any excuse to avoid this bookkeeping strategy.

5. Automate and Integrate Accounting Systems

In addition to the above, you should consider automating and integrating your accounting systems and processes. Even though automation is necessary for improving the performance of your finances, you first need to focus on understanding and streamlining the processes as it would allow you to maximize your return on automation efforts.

A commercial ERP software should help streamline general accounting and provide the results that you are looking for. It will operate as a primary system for general accounting. However, the emergence of cloud-based tools has changed the game. It has become a lot more affordable for organizations to improve their financial activities because of the availability of these products. As long as you take advantage of such tools, you will improve general accounting and reporting, which would have a positive snowball effect on business performance.

As you might already know, manual data entry is likely to cause errors no matter how experienced or careful your accounting team might be. For quality data, you need to switch to an integrated system. It will facilitate effectiveness and efficiency so that you don’t encounter problems later down the road. When you consider top organizations, you will come to realize that their internal or external system is linked and automated. Only through automation can you expect better KPI results.

For instance, you will benefit from correct journal entries when you opt for an automated solution. You should keep in mind that consolidated financial statements require the use of software to avoid the possibility of any mistakes. Otherwise, you could make costly errors that jeopardize your business. Don’t hesitate to put automation to work for you, your bookkeepers, and your management accountants.

6. Leverage Emerging Technologies

Lastly, you need to keep an eye on the latest technologies to ensure that you implement them early on. The emerging tools are there for a reason. You can use them to improve general accounting. Some examples include blockchain, cognitive computing, and robotic process automation (RPA). For those of you that don’t know, RPA is actually server-based, and it combines different processes with business rules or decision models without requiring much human oversight.

As more and more businesses realize that RPA has a lot to offer, it is in your best interest to jump on board. The last thing you want is to miss out on some amazing opportunities that may even improve your profitability ratio. You will be truly impressed by what the latest technologies can do for you. They can help your business unleash its full potential. The most successful bookkeepers, business owners and management accountants are those that leverage the latest offerings.

Conclusion

It is important that you adopt different strategies to ensure that your business succeeds. Consistently high business performance requires a high level of bookkeeping strategy and financial management. At the end of the day, it all comes down to having an open mind, getting the help you need, staying organized, using the tools at hand, and keeping up with the latest trends.

Sound Accounts helps business owners like you succeed with superior bookkeeping strategies that improve business performance and solidify long-term success. To learn more about the many ways we can strengthen your business, connect with us today. 

For more information about implementing better bookkeeping strategies, check out our frequently asked questions below.

 

FAQ

How can accounting and better bookkeeping strategies Improve performance?

Accounting is considered the language of business. It allows you to create and refine your workflow, as well as minimizing mistakes. By ensuring that proper accounting practices are followed, you can expect your organization to succeed.

How Does Bookkeeping Improve Your Business Operations?

Bookkeeping improves business operations by ensuring that you gain access to accurate records which you can use for making decisions.

Great bookkeeping adds tremendous benefits, including improved services, a better handle on cash-flow statements, a streamlined accounting process, better performance management, and a closer watch on resources and items. It readies you for E-Commerce Capability and prepares you for better operational strategies, diversification strategies, and overall corporate strategies. 

It also helps you make the most of your financial reports, financial statements, and other departmental reports, smooths over processes for employees so you can make the most of their capabilities instead of watching them spin their wheels on other things. It empowers your accounting research, improves professional services for your clients, improves client trust and loyalty along with customer experience, helps you navigate changing financial conditions, and with the right people in place, allows you to overcome the challenges of accounting.

How important is learning when it comes to finances, bookkeeping, and accounting?

It is important to stay current when it comes to ongoing education within principals and practices of accounting and economics. For a business owner, your grasp of financial and investment concepts will greatly affect your outcome and your position in the market. You can take online classes, join professional groups, get mentored by a professor of accounting, read the journal of accounting studies and the journal of accounting research, and shadow excellent bookkeepers both within your organization and others finding consistent success. 

What are 4 of the most important activities In bookkeeping?

Bookkeeping involves many practices, some simple, many that are more complex. These are simply 4 of the most common practices:

• Analyzing financial transactions and ensuring that they are assigned the right account.
• Writing journal entries that are debited and credited to the appropriate accounts.
• Posting entries to relevant ledger accounts.
• Adjusting entries once the accounting period ends.