Accounting is a core business area in every industry and in every business—no matters its size. Good accounting processes help you make strategic decisions and allow you to analyze company profitability. Without the right accounting data, you can’t tell where your profits are headed and where you need to cut costs.
Luckily, we have a list of basic bookkeeping tasks that will not only make your job easier, but will also bolster the efficiency of your overall business:
Track your expenses
Tracking your expenses is the key to efficient processes. And while you’re at it, make sure you’re categorizing personal and professional expenses separately. A lot of business owners make the mistake of using the same card to buy items for themselves and for the company. At the time of bank statement reconciliation, this creates discrepancies and may even understate/overstate your bottom line.
This also results in inaccurate allocation of business funds and leads to a lack of cash flow when the business actually needs them. We’re sure you don’t want to be left scratching your head toward the end of the fiscal year, wondering whether you spent the money to buy new office equipment or to take your wife out for dinner.
Other than that, business and personal finances commingling can even land in hot water with the authorities, leading to the loss of the ‘limited liability’ label.
Establish internal controls
It’s always better to detect inaccuracies and fraudulent activities internally than to wait for external auditors to do so for you. One way to establish internal controls is by establishing dual control for every accounting process. For instance, if one person is responsible for writing the check, another could reconcile the bank account, and maybe a third employee could sign it off.
Similarly, the person responsible for opening mails shouldn’t be the one carrying out other accounting functions.
Outsource your accounting processes
Carrying out your accounting processes on your own is administratively taxing. You’ll need to hire accountants who have the right academic qualifications, skillset, and experience.
Getting an accountant on board also means incurring payroll costs, hiring and recruitment costs, training costs, and even infrastructure costs. The personnel will need to be given company resources to work with and appraisals to keep them motivated.
On the contrary, outsourcing the task will result in lower costs and professionally managed services. Most accounting services have years of experience in working with a wide range of industries, and are well-aware of the regulatory framework that governs accounting. At a lower cost, you get more detailed accounting reports and analyses.
The accountants at 3Alpha will help you guarantee sustainable financial growth! We are an offshore accounting service provider that also provides tax consultancy and database management services.