Proper accounting is a major component of the overall success of any firm. Poor accounting, on the other hand, can interrupt your cash flow, lead to payment errors, or even cause taxation problems.
There are three major categories of poor accounting, and this post will break each of them and arm you with important strategies for addressing each of them.
1. Financial Record-Keeping Failures
Negligent record keeping is the leading cause of accounting and money management. If your firm isn’t keeping current and accurate financial records, it is destined to fail.
To ensure records are up to date, you should enter specific ledger items such as payments and invoices every week. Depending on the specific industry and scope of your business, you may want to consider estimating cash flow forecasts each week. At the very least, cash flow forecasts should occur monthly, along with detailed profit and loss statements.
In addition to incorrect data entry, inconsistent reconciliation among different bank, credit, and balance sheet accounts is also a sign of poor accounting. Many firms wait until the end of each month to review all account transactions to ensure that they match. However, to ensure proper cash flow and acceptable levels of disposable assets, it is a far better idea to integrate account reconciliation into your daily accounting routine.
Of course, many firms will have neither the time nor human resources to attend to all of these accounting matters while maintaining perfect accuracy. In these cases, an appropriate digital accounting management platform can prove indispensable.
2. Accounting Process Failures
Every firm needs a standardized accounting process. If you don’t have one, it will not only lead to errors, but it will also inevitably slow your business processes overall.
To evaluate your current process, consider these questions: Is your firm using consistent payroll codes? Are the same team members performing the same accounting tasks on an ongoing basis? Do firm projects flow through the appropriate established accounting channels each time?
If you cannot answer all of these questions in the affirmative, you are likely suffering from one or more systematic accounting process failures. Remember, firms that standardize these processes are far better equipped to prevent easily avoidable mistakes and eliminate roadblocks to business growth.
If you want a scalable business that embraces expansion at all stages of growth, standardized accounting processes are an absolute must. The consistency that goes hand-in-hand with standardization allows you to increase volume without compromising essential business elements like quality, performance, and service.
Additionally, a comprehensive accounting management platform completes a large number of common accounting practices automatically, ensuring that they are completed timely and accurately each time.
3. Digital Accounting System Failures
Many firms already have digital accounting systems in place to do much of the heavy lifting when it comes to keeping your firm’s financial matters in order.
If that’s you, that’s great! But don’t forget that digital systems can fail and new, better alternatives will always be springing up. Consider this: Is that software able to keep up with your pace of growth? Is it equipped to scale with your company and take you to the next level?
Although it may be a hassle to transition to a new accounting platform, you certainly aren’t doing yourself any favors by sticking with your current system if it presents any obstacles to your growth and efficiency.
First and foremost, a good accounting platform must remain up-to-date with the rapidly evolving business environment. If you haven’t received a software upgrade from your accounting tech company in quite some time, there’s a very good chance that your platform should be replaced.
Also, keep in mind that a quality accounting platform will work in collaboration with other firm departments and functions. If your accounting platform doesn’t connect directly with other aspects of business such as workflow processes and project management, that’s another reason to consider an upgrade. This connectivity will prevent you from wasting considerable time and risking ongoing mistakes by reentering the same data in several systems.
Get the Help That You Need with Quality Accounting Software
Transforming accounting practices to bring them in line with preferred industry standards is certainly no easy task. Even for small firms, modern business practices virtually demand the help of account software, but no two digital accounting platforms are created equal. Luckily, consumers have the help of independent digital technology authorities such as GetApp.
In 2021, GetApp named BQE CORE the leading professional services platform for accounting based on hundreds of individual user ratings. Users assessed the platform according to five key criteria:
- Ease of Use
- Value for Money
- Customer Support
- Likelihood to Recommend
In addition to ranking first in the Accounting Software category for 2021, BQE CORE has previously earned GetApp honors for cloud accounting software as well as several different areas of professional services management.