Struggling to find time to do your business accounting?
Whether you love numbers or would rather face a trip to the dentist than sit down with your finances, there’s no arguing the importance of staying on top of your accounting duties.
The more you put it off, the more complicated the task gets, until you are so behind that you’re faced with a virtual mountain of paperwork to get under control by the end of the month.
If only there was a way to make accounting more simple!
How about five ways?
Let’s look at some easy ways to make your life easier and your accounting duties less onerous. Read on for my top tips on accounting simplicity.
5 Ways To Simplify Your Accounting
1. Don’t Mix Business With Pleasure
This rule could apply to many things, but let’s stay on the subject and talk about finances! It can be tempting to use your personal credit card to pay for a business expense when you are in a rush and can’t find the right card – or vice versa.
Of course, you can pay the money back, but then you have to record the transaction, and things can get messy quickly - especially if you forget what you have been buying and with which accounts!
The golden rule is to keep separate bank accounts and credit cards for your personal and business expenses. That way, you will avoid any confusion and save yourself the time and effort of tracking and correcting your purchases.
2. Embrace Automation
We have tiny cameras that fly, a robot on Mars, and software that can automatically send invoice reminders to late-paying clients! Robots on Mars sound way more exciting than automatic invoices reminders but I know which one I’d prefer (hint… I’m all about the numbers).
Automation is an enormous timesaver and you should be embracing it at every opportunity. What’s not to like about getting computer software and apps to take care of jobs so you don’t have to! Automation reduces the risk of human error, saves you and your team time, and just makes life easier.
There are many examples of how to automate accounting tasks, but here are two of my favourites.
Number 1 – Automated Invoice Reminders. Instead of combing through your books every week to see who has paid and who hasn’t, set up automated invoice reminders. Most accounting programs have these as an option.
Xero has three default reminders set up (which you can customise). It will send out gentle reminders at 7, 14, and 21 days after the due date of the unpaid invoice.
Number 2 – Hubdoc or Dext Prepare – These programs both integrate with Xero and give you the gift of time and organisation. Both platforms manage all the documents used by your business – including receipts, invoices, bills etc.
You can choose to upload these documents manually (using your mobile phone camera or email) or set the programs up to automatically fetch them from the online websites you tell them to.
Once uploaded, Hubdoc or Dext Prepare will select the pertinent information from each document and have it ready to process with your accounting software. It means an end to tedious data entry and filing, and peace of mind knowing all your important documents are stored safely and securely. It’s a beautiful thing.
3. Get Into A Good Routine
This one may seem obvious, but it’s a lot harder than it sounds! As a business owner, you have a dozen things to do at any one time. It’s easy to look at a financial task and think – “this is quick and easy; I’ll take care of it later.” But later never comes, and you are left with books that don’t balance and mysterious unpaid bills!
The golden rule is don’t put things off. Get into the habit of taking care of your tasks when they crop up, or allocating a set time daily or weekly to devote to all things financial.
Start with the basics by reconciling your accounts regularly. This can seem tricky, but when you have accounting software that can be accessed from anywhere at any time, you will find a spare minute here and there. I have been known to do this on my Xero app while my kids were at swimming lessons!
Getting paid is another seemingly obvious one, but you would be surprised how many businesses forget this step.
I’m still waiting on a tradesperson to send me a bill after almost a year, and I’ve reminded them three times! Unless you hate money, send invoices as soon as the work is complete, or you will mess up your books and your cash flow.
4. Make The Most Of Xero’s Features
It goes without saying that these days, you need to be using accounting software. Big tick if you already are – you have already simplified your accounting! But are you maximising the features on offer?
Programs like Xero are regularly updated and optimised to make your life easier, so take advantage of what they can do for you.
To give you an idea, you can use items to reduce the amount of repeat typing you have to do for the standard services and products you offer.
Repeating invoices are another handy timesaver that can help you get paid every month.
And setting up bank rules can really speed up the bank reconciliation process. For example, when paying wages, you could set up a rule so that every time a payment appears with your employee’s name, it is automatically coded to Wages and all you have to do is click “OK”.
5. Call In The Troops
Instead of sweating over your finances, Googling every feature of Xero to see what it does, and getting confused over your GST responsibilities, consider saving yourself time (and a headache or two) by calling in a professional.
You may think you are saving money by trying to DIY, but touching base with an accountant is money well spent, and we can actually save you money.
Trio Accounting can help you simplify your accounting, understand your accounting software, and really grasp the story your numbers tell you about your business. We go beyond annual accounts and saving a few dollars on your tax bill.
With sound business advice, coaching and support, we help you and your business thrive. Get in touch today!