Drastically Improve Processes In Your Bookkeeping Practice

If you want to provide your clients with accurate and timely financial data on which they can base important business decisions, then streamlined and effective accounting processes are the key to achieving this.

Despite processes being the foundation of a good bookkeeping practice, too many accounting firms struggle to work out what processes add to business efficiency and produce highly accurate financial reports for their clients and which add little value.

We focus this discussion on accounting process improvement with a view to utilizing automation more effectively, and thereby improving the financial health of your accounting firm. We also turn our attention to documenting processes, client education and measuring the financial impact of processes. Join us if you’re serious about changing the way your firm tackles its business processes.

4 Ways to streamline your firm’s accounting processes

1. Embrace automation

If you haven’t already started using automation as a way of speeding up the processing of information and eliminating human error, then this is a first step. As recently as 3-5 years ago, discussions around automation were about convincing bookkeeping practices and businesses that automation could save money, time and resources.

Now, we’ve moved beyond that. It’s no longer a discussion about whether you should use it, but how you can integrate automation accounting software as quickly as possible into your business.

Many other accounting businesses have recognized that automation brings a level of efficiency that hasn’t been achieved by manual data capture and report generation. The adoption of AI technology has moved along so rapidly that it has been reported by the SBE Council that 75% of all small businesses now use AI technology as a way of improving business processes.

The starting point

Understanding where you can use automation for improving financial processes will require you to undertake an audit of your current processes and systems. Many accounting systems have recently added automation features to their subscriptions, and this number is increasing. Spend time mapping out your existing workflows, and how many systems you use to get to the end goals of meticulous financial reports and tax submissions for your client.

After this audit, your processes and tech stack may have revealed something like this:

Multiple accounting systems are being used because the accounting firm is in the slow process of transitioning to a more advanced accounting system, but that is making it difficult to get cohesive and streamlined accounting practices implemented. The effect on clients may be minimal, but the effect on the accounting firm is disruptive and costly. So, what’s the immediate plan of action?

Immediate action plan for improvement

Standardize accounting software by migrating to QuickBooks and an integration like Envoice. Together, these cloud accounting software provide you with the following features:

• One system to onboard your clients and receive important documentation (Envoice)
• A shared workspace with your team and customers that fosters collaboration and processes (Envoice and QB)
• A powerful pre-accounting system that uses machine learning and AI technology to receive, capture and categorize all client documentation, speedily and accurately. With ExactExtract providing human-in-the-loop verification and 99.9% data accuracy, bringing an end to manual data entry (Envoice)
• A mobile app for client employees to create expense reports (with scanned receipts) and send them for approval and reimbursement (Envoice)
• Automated approval workflows (Envoice and QB on higher subscriptions)
• Reconciliation of accounts and bank statements (QB)
• Payments (QB)
• Payroll management (QB)
• Production of accurate and integrated financial reports such as profit and loss statements, balance sheets, and cash flow statements (QB)
• Automation of all accounting tasks related to tax preparation (Envoice and QB)
• One place to store all your important documents (Envoice and QB)

This is not an exhaustive list and there is much more these two systems do together to bring accounting professionals right into the center of the most efficient accounting practices.

What do we mean by this? It’s simple: instead of your team being in charge of keeping business processes and sometimes missing the mark, Envoice and QB together prompt your team members when it’s time to enter into a particular process and action a task. This alone will go a long way to making a successful accounting firm!

What’s more, both QB and Envoice integrate with a number of popular software such as DropBox, OneDrive, Wise, Paypal, and much more. So, you don’t need to clean up your favorite systems.

2. Document processes and policies

In the first process improvement, Embrace Automation, we touched on many processes that would be affected and improved by consolidating your accounting systems into two core software that could do the work of many. However, there are a few more process improvements that can drastically change the face of your business. This one is about transparency.

There are some very good reasons why you should take the time to document your processes and policies and it goes like this:

• Documenting processes and policies ensures that everything your accounting does is available for your team and your clients to review. Your team members will follow the same steps, and this reduces omissions when it comes to tax filings, financial reporting, and client communications.
• Accounting firms must comply with various regulations (e.g., GAAP, IFRS, tax laws, data protection laws like GDPR). Documented processes for compliance checks and data handling ensure that all team members understand legal obligations and help the firm avoid penalties and reputational damage.
• New employees can quickly be trained on processes, adding clarity to responsibilities and job tasks.
• Audits and compliance reviews are simplified because there is a standard of measurement from which to work. This can minimize the time and the cost of external audits.
• When processes are documented, it’s easier to identify inefficiencies and opportunities for improvement.
• Documented processes and policies reduce reliance on a few key individuals. Team members are empowered to make decisions on their level of responsibility and can be held accountable for the decisions.
• It boosts client trust and satisfaction when they can see you have transparent processes and policies that everyone respects and sticks to. Accounting firms need to build a much higher level of trust with clients because they are handling confidential and sensitive financial information.

3. Educate your clients

If this discussion were about starting a new bookkeeping practice, we would suggest that you first spend time documenting processes, then choosing software that supports those processes and then begin taking on clients. However, this is often not how accounting firms get their start.

When you’re first in business, it is tempting to put processes and software in place that clients want and are least disruptive for them. However, this isn’t the best method for your practice in the long run. Eventually, it becomes a problem.

How to eliminate repetitive bookkeeping tasks?

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and we will show you how

If you’re pitching to a new client, it’s important to be upfront about how you do business, what systems you use and what doing things this way has achieved for other clients.

If it’s an existing client that you need to migrate to new processes or systems, the same rule applies. Yes, they will be concerned with how it will affect them, but managing client expectations is part of the job. When the benefits outweigh the cost, that is when they will hop on board. If it’s an existing client, you can leverage the relationship of trust and efficiency you’ve built up over time with them.

The transparency that comes from documenting your processes and sharing them, as well as how automation is a strong factor for getting accurate financial reports and analyzing financial data, will win over even difficult clients – they just want good results – and don’t we all?

4. Measure the financial impact of your processes

So far, we’ve discussed automation, documentation of processes and policies, and client education as ways of drastically improving the success of your bookkeeping practice. As we come towards the end of our discussion, we propose that measuring the financial impact of your processes is an excellent way of uncovering wasted time, money, and resources.

Here are a number of ways you can do this:

• Use time-tracking tools like Harvest, Toggl, or Clockify to measure how much time is spent on each task and process. Analyze billable vs. non-billable hours to measure productivity and profitability.
• Measure team performance with metrics such as hours logged per project, utilization rate, and KPIs for core processes.
• Use client feedback tools to gather information. If the client retention rate is higher where there are well-structured processes, this gives you ideas on where to improve.

Quantifying financial processes can be tricky but not impossible. In fact, automation is making this more possible than ever before. When you measure a business process for financial viability, you can be sure that it will get focused. This kind of system is not about tracking tasks for its own sake either. You should track only important key metrics that will deliver the kind of insight you are looking for.

Conclusion

This brings us to the end of our discussion on ways to drastically improve processes in your bookkeeping practice. If you’ve gotten this far, it’s clear that you are serious about changing how your firm manages its business processes. The key points are as follows:

1. Embrace automation
2. Document processes and policies
3. Educate your clients
4. Measure the financial impact of processes

By carefully considering how you can implement these steps in your bookkeeping practice, you can improve the financial health and sustainability of your firm for years to come.

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Envoice was developed with accountants and bookkeepers in mind and has helped other outsourcing businesses manage clients globally. Sign up for a free trial with no obligations and watch Envoice go to work on your processes.

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