Accounting can be one of the more time-consuming and expensive routine tasks for small businesses.
An estimated 20 percent of small-business owners spend 10 to 24 hours a month on accounting, and in the process can lose as much as half a week of productivity during the same time period.
When related tasks, like payroll and tax preparation, are factored in, 58 percent of small-business owners wind up spending more than 41 hours a year on accounting, including 40 percent who spend over 80 hours a year, which is equivalent to two weeks of lost productivity.
In addition to this lost time, 77 percent of small businesses spend $1,000 or more on administrative costs for these tasks, including 16 percent who spend $20,000 a year or more. Fortunately, you can cut these costs and win back lost time by implementing some smart accounting automation procedures.
Start with the Right Accounting Software
To automate your accounting effectively, it’s essential to start with the right software solution. Many small businesses use spreadsheets, which waste time due to the need for manual data entry, categories and formulas, in addition to the lack of integration with relevant financial data, such as revenue, payroll, inventory and tax data.
Desktop-oriented spreadsheet and accounting programs can further limit your ability to integrate mobile-collected financial data, as well as your ability to manage your books when you’re not at the office. Instead, choose a smart online accounting software solution like Sage One. Through its cloud-based platform, Sage One lets you manage your books from any location or device. It also empowers you to automatically integrate your accounting data with data from mobile devices and financial apps.
Integrate Payment Processing, Accounting Solutions
To utilize your accounting software with maximum efficiency, you should use it to integrate your accounting books with your payment processing solution. Manually entering transactional data into your accounting program duplicates efforts, wastes time and risks error.
To streamline this process, the best practice is to set up your payment solution to automatically export data into your accounting books. Your payment processor should integrate seamlessly with cloud accounting software. This will allow you to automatically transmit credit card transaction data into your accounting database for instant updates. By using this application, you also reduce the risk of manual data entry mistakes and eliminate time wasted balancing your books.
Automate Your Payroll
Payroll is another function you should integrate with your accounting software to improve your efficiency. Save time and money by choosing a payroll software solution that integrates with your existing accounting software to automatically calculate your payroll, send paychecks and direct deposits, and update your payroll expense tracking.
Integrate Your Inventory Tracking
Tracking inventory is another time-consuming, expensive process that can be streamlined by integrating your accounting software. Warehouse management software provider Scanco estimates the average business spends 25 percent to 35 percent of its operational budget on inventory, a cost that can be slashed by 35 percent by better inventory management. A key to making this improvement is using an inventory management solution that integrates bar code scanning with inventory tracking and your accounting database.
Export Your Tax Data
Last but not least is leveraging your accounting solution to streamline your tax preparation. By exporting tax-related financial data from your accounting program into a tax preparation software solution, you can reduce time spent on tax preparation from 40 to 80 hours a year to just an hour or less per quarter.
Routine tasks can take time away from productivity, ultimately affecting your bottom line. Get hours back in your day and week by implementing these time-saving solutions.