Avoid Costly Mistakes by Standardizing Your Accounting Processes
Imagine serving your customers, clients and/or members without standardized accounting processes to maximize their experiences. For example, if you run an trade association or not for profit organization, imagine if there was no clear and consistent way of handling your annual meetings or other regular events – from attendee registration, booking speakers, logistics management during the event, and all the way through to getting feedback after the event – your constituents would likely be dissatisfied, as well as you and your office staff. Standardization provides the means for ensuring thorough and complete customer experience in an efficient manner.
The same goes for your Accounting processes. When your business or organization is small, you might start out by handling your accounts receivable, supplier/vendor disbursements, payroll and financial reports in a ad hoc fashion. However, just as inconsistent delivery of the customer experience can wreak havoc to your business, so can lack of standardization with your bookkeeping and accounting. Standardizing your Accounting processes helps you to avoid costly mistakes that could potentially ruin your business’ reputation.
Here are some Benefits of Standardizing your Accounting Processes:
Reduce Your Risk of Errors: Having a standard operating procedure for how you handle money coming in and going out of your business is very important. Standardizing your payment processes using a technology solution not only makes them more efficient, but also reduces mistakes made by manual data entry. Controls embedded in the automated system and e-payments help to reduce fraud. For example, with a bill-pay solution like Bill.com, you can eliminate your paper bills and have suppliers remit bills electronically to your dedicated Bill.com email account. From there, Bill.com helps your bookkeeper ensure the proper account coding and payment dates, and automates the approval and payment processes, making it easy for you to have accurate real-time, even when you are away from the office.
Bill.com syncs directly with systems such as QuickBooks, so that you don’t have to manually re-enter data into your accounting system. The paperless environment facilitated by this standard bill pay process helps you avoid accidentally paying duplicate or incorrect amounts. It also helps manage your cash flow by scheduling e-payments so that they are disbursed at just the right time. With more accurate, real-time financial information at your fingertips, you’ll avoid making bad decisions based on faulty data.
Allow You to Focus on Value-Added Services: With standard and automated Accounting processes, handling high volumes of transactions becomes more efficient. You’ll spend less time on your back-office administrative functions and more time devoted to your customer’s experience. What can be better than that?
Facilitate Business Continuity: Once you standardize and document your procedures in writing, it allows you to cross-train others to do the work, avoiding disruptions when the person who normally handles the process is on vacation. For example, processing payroll can be a detailed and tedious process. If done incorrectly, it can significantly impact your staff’s morale and trust in the system. Regardless of whether you use an outsourced payroll service, you still want to ensure the proper service provider hand-offs and correct payroll entries are understood clearly to avoid unnecessary mistakes that take precious time to research and correct.
Promote Continuous Improvement: When you’ve done establishing standard processes, it’s good to revisit and improve upon them based on feedback from your staff and other relevant parties (e.g., suppliers). Circumstances change over time and what may be ideal today may not be next year, so be sure to think of this an ongoing best practice; It doesn’t necessarily require large amounts of time to do in future iterations, and may identify additional efficiencies and controls for your practice.
How to Start?
To begin improving your operational efficiency, focus on any standardizing processes that involve handling a high volume of transactions on a frequent basis. What are those areas that you and your staff spend the most time in, but ultimately deliver lower value to your customers? Delve into these processes and assess each step and its relevant value: Is there a way to automate the step? Is the step even necessary? Are there too many handoffs? Is the information stored in a way that promotes efficiency? [See Three Tips for Effective Sales Inventory Management, for guidance on improving this process.)
If you’re having trouble figuring out what’s the best way to standardize your process, don’t be afraid to ask others and gather lessons learned from their experiences. Although an investment in time, doing this assessment and making any needed changes will benefit your business in the long run. As you grow, an outside professional firm may be your best option, as they are in the business of providing effective and efficient bookkeeping and accounting services.
In sum, consumers expect consistent product and service experiences, and your clients, customers, and/or members are no exception. Standardize not only your customer-facing processes, but also your back-office Accounting function. Making those processes more efficient allows you to focus on what matters most in your practice.
How Consultance Accounting can help: Consultance leverages exceptional talent, proven processes, and top technology platforms to deliver timely & accurate financial solutions that help small and medium-sized organizations improve productivity, increase profitability, and achieve their goals. We use cloud-based technologies that integrate with each other to streamline the process. Contact Us if you have questions and/or need more assistance.