Optimizing Your Accounting System - Measures to Ensure Your System Functions at its Best

Accounting system optimization involves implementing software to enable quicker turnaround for accounting functions. Specifically, optimization can make for easier, faster, and more accurate accounting, such as processing payroll or resolving accounts payable. Optimizing your accounting systems also reduces the need for manual practices.

Is your accounting system optimized effectively to fully leverage its capabilities?

It's a common practice for accounting firms to rely on software programs to carry out their accounting functions. However, if the programs are not optimized well, the users cannot take full advantage of the system's benefits, resulting in a system that boasts the latest technology but one that is not leveraged.

There are many benefits to an automated accounting system, especially for a small or mid-size business.

• Computerized accounting ensures greater accuracy and speed, resulting in more dependable operations.
• Automated accounting systems save time over manual processes, enabling you to complete more in a shorter time period.
• Automated accounting systems reduce costs associated with establishing a dedicated accounting department, requiring permanent skilled manpower.

Ensuring Optimization

Optimizing your system does not mean completely overhauling your existing system or installing expensive, new software.

However, your first consideration needs to be your company's operational requirements.

Optimization involves professional software knowledge and is best managed by a professional who understands your company in terms of business offerings and client deliverables. This approach considers the importance of customization and offers solutions that are tailored to your unique business needs.

Customized solutions account for your business deliverables and client requirements, ensuring that your system is utilized optimally. These solutions also reduce time and financial expenses, while significantly increasing productivity.

Tips for effectively optimizing your system include:

• Undertaking a comprehensive assessment of your needs and requirements.
• Including non-accounting functions such as time tracking or resource allocation.
• Generating readily accessible reports in an electronic format, thus eliminating the need for paper reports. This can also include interfaces that allow you to access data and accounting information, independent of physical location.
• Reducing the need for human intervention and streamlining processes with adequate security measures in place.

If your accounting system is fully optimized, your business will run more efficiently allowing you to take advantage of significant operational improvements.

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.

Automating Accounts for Profitability

As we acclimate into a world where speed is essential and computerized work has become the industry standard, automating accounts is now a necessity, not an option.

While automating your accounts results in immense time savings and cost reductions, did you realize its direct, positive impact on profitability?

Accounting and bookkeeping functions are often considered to be heavily dependent on manpower and paperwork. This subjects those tasks to human error, and they are often time consuming, especially when details may require validation or rechecking.

Compare this with the business movement towards e-transactions, where payments become faster and gaps between payments due and payments made are reduced.

Simplify, Streamline, and Cut Costs

When you automate, you receive the benefit of integrating data and information across your accounts. This integration optimizes resources, which means that automating your accounts can simplify your workload.

Unlike traditional accounting where different books are used for different entries, accounting software allows users to create entries in a single field. After this, depending upon its configuration, the software will connect the entry to other similar transactions and add it to the consolidated report. Accounting software can also be linked to credit card or bank accounts. This allows payments from the card or bank account to be dispatched or received, while also getting recorded against the respective accounts. These features not only simplify the process, they free up the cash flow, making money available for operational expenses.

Automating helps reduce the time required to balance your accounts and thus closes a single cycle from payment due to payment paid faster. This translates into increased cash in a shorter period of time. The process of automation helps close the gap between the time incurred to identify human errors and take corrective action, thus accelerating closure.

Do-it-Yourself or Enlist a Vendor?

There are other factors that can help make automating accounts a profitable endeavor; for example, selecting the right vendor. When you choose a vendor, carefully evaluate the deliverables that they promise. Check that the vendor thoroughly understands your business, client deliverables, and any of your requirements. Any recommended solutions for implementation should be directly relevant to your business.

Ideally, the vendor who is entrusted with automating your accounts department should have experience handling and managing the requirements of a small business or a startup. The vendor should also be able to manage the process end-to-end, including providing support and maintenance help after installation.

The idea of automating your accounts is basically to enable you to focus on your core deliverables without losing track of your cash flow and revenue management. In case you plan to undertake the automation yourself, keep in mind that certain areas such as troubleshooting and timely review of the system are necessary.

This means you need experts on standby to conduct regular repairs and troubleshooting when needed. If you plan to implement the automation yourself, you might also need to source IT infrastructure and recruit and retain a team of IT professionals to manage your automated accounts system.

For automating small business accounts, ideally, you need solutions that allow you the convenience and cost benefits of scalability. Scalability refers to paying for only those services that you utilize and not the entire solution. Seamless integration and error-free accounting are key to your time and costs savings.

If a vendor can promise you all this, combined with IT support and scalability, it makes sense to enlist their assistance while you focus on your clients. The more time you free up, the more you can increase your profits by managing more projects or adding value to your client deliverables.

Thus, automating accounts can only add to your profitability.

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.

Why Does Your Small Business Or Startup Require Automating Accounts & Bookkeeping?

Today, automated accounting is an integral element of business operations. Irrespective of the size of your business, automating your accounting system can lead to increased efficiency, translating into savings of cost and time, and better access to amounts receivable. This is possible because the automating software completes transactions rapidly, allowing customers to approve payments immediately.

Apart from secure payment transactions, automating has a host of other benefits:

• Timely updates of records and data
• Speeding up existing processes
• Reducing or eliminating the need for periodic human intervention, and thus reducing error margins

In the competitive times that we are currently living in, there is very little room for error. Depending on the industry type, acceptable human error margins could hover anywhere between 2% and 5%. While documentation of error is a statistical function and is relative to assignments, automation can help reduce errors.

Automation and Accounts

Automating your accounts will save you a lot of time that would otherwise be used in making manual entries. Functions such as recording credits and debits are an intrinsic part of accounting. Doing this the traditional way eats up time and exposes data to errors. These could range from simple, typographical errors to larger, more serious ones. However, once you automate processes, the software creates folders or sections that are programmed to allot entries to the assigned columns, without error.

With automated systems in place, tracking accounts is also an easier process. Needless to say, automating also plays a role in deterring fraud.

Security and Integrity

The key to automation lies in reducing the opportunities for error (OFE). Lower the OFE, higher the accuracy of your final product. Once programmed, the automation software will also carry out regular updates and reports that can then be reviewed by concerned personnel.

At a time when data safety takes center stage, automated accounting works to reduce instances of human interface, ensuring safety and integrity of the process.

If your organization manages large amounts of numeric data, automation can prove highly cost effective. Automating software can carry out the same amount of work within shorter time periods, and with higher accuracy, thus eliminating the need to rework accounts.

Overview

• Automation allows for customization and improvisation at multiple levels and in a fast and secure manner. Automating your accounts system will ensure that they will remain in sync with the company’s growth. As your offerings grow, so will your accounts; automating will ensure that little or information is lost, while allowing the changes to be smoothly integrated into the existing systems.
• Automation allows for all concerned parties to access their information at will. This in turn, further frees up precious human resource for other areas needing intensive human intervention.
• Since automation also includes keeping a track of activity, there is lesser chance of mistakes going unnoticed for large periods of time. Your vendors and customers both can track their data independently and in a secure manner, reducing chances of fraud.

Automated accounting can prove to be indispensable; especially for small and midsize businesses where budgets are limited. The dual problem of focusing on client requirements while staying well within budget outlines can be resolved by automating accounting processes. Automation can help you do away with the need to establish a resource pool that needs to be trained and maintained. More importantly, it can help you meet your business requirements well within the outlines of your budget.