Every year, after closing your accounting and completing your annual audit work, don't you find yourself thinking how you could make your routines easier so that the next year is lighter and without unnecessary stress? Now you will check out 8 accounting tips that can make your new year more effective and leave part of your free time to solve emergencies, avoiding overloading your daily routine.
1) organize files
It may seem simple, but precisely because it seems simple, organization is a very easy routine to postpone. Organizing files, whether digital or paper, can generate a high reduction in waste in your department.
Although we are living in a digital world, there is still a need for paper files, mainly to comply with some legislation. But there is room for improvement. Even as your department has reduced paper usage and therefore the need for large storage cabinets, check out what you really need to retain on paper and how you can store that information more efficiently for quick retrieval.
The same goes for digital files. We keep adding folders and subfolders to our computers to store our files. How many times have we gone through that storage system and cleaned out the files we no longer need? Also, look at the way you are storing files and ask yourself: Do you need to keep a separate file for each month, or can you move old files to a different location after a certain period of time? Should some files be stored on the network for everyone to access? These and other questions should be answered periodically so that you can assess the best use of space on your computer.
2) Make a list of procedures
Much of our monthly responsibility is related to the month-end closing process. Take the time to analyze this process and before you think about changing things, try to understand the process as a whole, starting with the checklist of steps that need to be completed to close the month. If the process is not performed by one person, include the duties and responsibilities in the checklist to have a complete team list.
Once you've completed your to-do list, it's time to start analyzing the process. Ask yourself which of these tasks should be done first and which ones depend on other tasks finishing during the process. Also consider materiality. Do you need to review all accounts monthly or are there some accounts that can be reviewed quarterly? If you can eliminate some accounts from your monthly reconciliation list, your process can become a little more manageable.
3) Document policies and procedures
Many companies have great policies and procedures in place on a day-to-day basis to provide accurate and timely financial data. This data is important for the management of a company as it helps leadership to respond and react to situations as quickly as possible. Unfortunately, those same companies that have great policies and procedures don't document them. If a key person leaves, the entire company loses, even the recovery of information.
It is essential to maintain documented policies and procedures. If your company has a policy and procedure manual, designate someone to review and update this manual at least annually. Employee turnover is something we often overlook, but it can be planned for because it's unavoidable in most organizations. That's why it's also important to train potential replacements. The more people you have capable of performing other people's roles, the more flexibility your organization will have. This will also allow you to transition smoothly during periods of employee turnover.
4) Delegate low-risk tasks
With your list of procedures mentioned in item 2, consider analyzing whether the right people are performing the risky tasks. Delegating is important and you need to delegate based on risk. While you might be able to stick with the higher-risk accounts, it's probably time to think about using the necessary staff to help with other tasks.
Like many small business accounting departments, you may have a limited number of staff. Or you might be the only one in the accounting department. Don't let that stop you from organizing your routine. You can use professionals from other departments for certain low-risk monthly tasks. You might be surprised how much some people enjoy contributing to the company while learning new tasks that can lead to new responsibilities.
5) Identify improvement opportunities
Changes in closing routines can generate huge savings in time and money. Pay attention to tasks that have been done for years, always in the same way, without any analysis. Who knows they can be simplified? What other procedures do you think your company is doing just because "this is how we always do it"?
6) Anticipate and manage risk
This is an area where we suggest investing time in advance rather than trying to review the fact and determine when and where the problem started. Small problems are always easier to diagnose and fix. Also, by researching these items on a day-to-day basis, you can identify other problems and risks that you can avoid in the future.
7) Interact with external professionals
While you would prefer to deal with your accounting-related issues internally, don't be afraid to contact your auditor if you encounter an unusual situation or if you are planning to make substantial changes to your policies and procedures. A new external view can be very beneficial.
8) Let your software work for you
While you may not think your accounting software is perfect, chances are it has a number of features you can utilize to make your function more efficient and effective. First, review the automatic monthly entries. Ask questions like: I use it for scheduling, but are there other areas I could use this feature?
Also utilize the ability of your accounting system to produce periodic reconciliation reports, or verify that your software has also incorporated the bank reconciliation tool. By manually maintaining an Excel spreadsheet to perform a bank reconciliation, you create additional administrative burden that may be unnecessary. Excel is a great tool, but there are times when we overuse it and create unnecessary schedules and reconciliations, when accounting software is likely equipped to perform.
It is also important to check that your accounting system is updated periodically, as many day-to-day issues are generated because the latest version is not running.
Each of the above tips not only leads directly to saving time and money, but will also help you to drastically reduce your stress at work. By continually analyzing the processes by which you operate, you can identify areas for improvement.
A TATICCA – ALLINIAL GLOBAL also provides integrated auditing, accounting, tax, corporate finance, financial advisory, risk advisory, technology, business consulting and training services. For more information, access www.taticca.com.br or e-mail taticca@taticca.com.br. Our company has professionals with extensive experience in the market and has certified methodologies for carrying out activities.