EA - Effective Business Strategies for Reducing Bookkeeping Costs

7 Effective Business Strategies for Reducing Bookkeeping Costs

When you are running a business, it seems like the bills are always piling up and making it hard to maximize profitability. If you want to have extra cash on hand after the expenses are paid, then you need to be looking at options to reduce your spending and increase your income at the same time. Today, we are sharing tips that you can use to reduce bookkeeping costs, which will help your profitability goals.

Tip #1: Organize Your Finances

Staying organized is the foundation for financial success. If your receipts are scattered and you can’t keep up with the payments that are due, then you will be wasting time trying to find the right paperwork. Plus, missed payments result in late fees and interest charges, which increase the overall amount that is paid each month. There’s no question that good organization can save you both time and money.

When your bookkeeper is working on your transactions and financial reports, they can only work on the documents that are provided. It doesn’t matter if you have an in-house bookkeeper or outsourced bookkeeping services… you are paying more than necessary for their time if they are spending hours sorting through a mess of paperwork.

The key is to implement a system right now so that the bookkeeper is provided with all of the necessary information for each transaction. For example, if you buy something and receive a receipt, take 10 seconds to make a note on the receipt to document the purpose of the purchase. Invoices that are paid online should be noted with the date of payment and the method that was used for payment.

If you are looking for ways to cut bookkeeping costs, then talk to your bookkeeper about the way the information should be presented. As a financial expert, your bookkeeper will offer suggestions and advice that will streamline the workflow and allow the bookkeeper to maximize the time spent on the project. The goal is to have a system in place that provides the bookkeeper with the information necessary to keep your books up to date, which requires organization at every step.

Tip #2: Use Proven Computer Software

Leveraging technology can be an effective way to organize your finances and avoid unnecessary busy work. For example, a document management system can be used to keep track of your receipts so that you no longer need to keep a shoebox full of random paperwork. Simply snap a picture of the receipt, then store the image in a cloud-based folder. This file can be shared with your bookkeeper for tracking purposes.

One other benefit of a document management system is that you can always find your receipts if needed in the future. Sometimes, it can be helpful to refer back to transactions that happened in the past to compare costs or evaluate overall spending for the day. This information is just a click away and can be accessed online, without the need to dig through piles of paperwork in the filing cabinet.

An accounting software should also be used if you are looking for ways to reduce bookkeeping costs. For example, this cloud-based software system can pull in the transactions that move through your credit cards and bank accounts. You can create categories that automatically file recurring transactions. Your bookkeeper will spend time evaluating the transactions that are coming through and auditing the system to ensure that nothing is missing.

A good accounting program saves you money because you don’t have to pay for the hours of manpower required for manual data entry. Even though you will pay a fee for the software program, it is a fraction of the cost compared to the time and money required to calculate the financial reports by hand.

Tip #3: Separate Your Business and Personal Spending

Mixing business and personal spending complicates your financial tracking, making it difficult for the bookkeeper to sort through the transactions. One way you can save money on bookkeeping costs is by creating a separate account for your business transactions.

A clear-cut system to define business spending and personal spending will simplify the reconciliation of the accounts. Additionally, it takes less time to determine the right deductions that can be tallied when it is time to do your taxes each year.

Tip #4: Build in Options to Scale in the Future

Cutting corners on your bookkeeping systems might seem like an effective way to save money right now. But you shouldn’t overlook the potential costs that will be accrued if you need to change accounting systems to scale your business in the future.

For example, it might seem like a good idea to select the cheapest accounting and bookkeeping system that will cover the basic necessities for your financial reporting. Even though this software might cover your bases right now, you will be facing bigger issues in the future if the software can’t accommodate the future growth of your company.

As a result, spending a little bit more right now could save you the cost of transitioning bookkeeping systems in the future. Instead of attempting a DIY system, bring in a team of financial experts who can offer advice about the right system designed to support your business growth in the years to come.

Tip #5: Use Technology to Improve Accuracy

Every time a mistake is made on your tracking and accounting, it costs time and money to fix the error. Even though errors are unavoidable, there are a few things you can do to reduce the potential mistakes that happen with your bookkeeping and accounting systems.

One effective solution is to leverage technology for the calculations and report generation. You can skip manual calculations and have peace of mind knowing your numbers are accurate and clear. Choose a system that delivers both financial intelligence and greater efficiency for your business systems.

Tip #6: Control Costs by Eliminating Waste

How much money is wasted each month and year due to payments and transactions that slip through unnoticed? You can offset the costs of accounting and bookkeeping services by leveraging the team’s skill set to reduce waste and unnecessary financial burden.

For example, your bookkeeper might be able to offer advice about reducing overhead expenses and improving the collection of Accounts Receivable. As a result, your income will go up and you can cut out expenses that are no longer necessary for your business systems.

Not only will you have the option to reduce the amount of money that is spent, but these in-house changes can also affect employee productivity. Your employees will understand the importance of streamlining business systems and sticking to spending goals. So, the daily decisions of the employees will support your overall business efforts.

Tip #7: Hire Outsourced Bookkeepers and Accountants

There’s no question that you need bookkeeping and accounting services. Most business owners assume that the simplest way to bring these skills into the company is by hiring an employee. But you need to think about the fact that you aren’t only bringing on the burden of paying the person’s salary, but you also need to carry additional costs of having another employee in the office.

The fully loaded costs will add up over time! Here is a quick overview of some of the expenses you will pay for a full-time accountant or bookkeeper:

  • Salary or wage
  • Benefits
  • PTO
  • IT and equipment
  • Office space and utilities
  • Overtime pay

Many businesses are choosing to outsource accounting services to avoid the fully-loaded costs of bringing on another employee. Do the math, and you might be surprised to learn that it is easy to save thousands of dollars a month by hiring an outsourced accountant as an alternative to a full-time employee.

This method is not only more cost-effective, but many business owners also find it less stressful to tap into the expertise of an outsourced team. It feels good knowing that the service provider has relevant experience working on the financial reports for other small and medium-sized businesses. Outsourced accounting services means that you don’t have to worry about employee management or training. Instead, you can hand off the financial details with confidence knowing your accounting team is taking care of the necessary tasks to track your accounts and reports.

Questions about Reducing Bookkeeping Costs?

Are you enjoying the benefits of outsourced accounting and bookkeeping services? If you don’t have a good system in place, then right now is a good time to make the changes that are needed to boost your financial strategy.

A variety of financial tracking and reporting aspects can be outsourced to our team, helping to free up your time so you can focus on business-building efforts. Common outsourced services include:

  • Accounts Payable and Receivable
  • Payroll Processing
  • Financial Reporting and Statements
  • Tax Calculations and Filings
  • Monthly Reconciliations
  • Credit Card and Bank Statement Audits

Our team of experts at Easier Accounting is here to assist with all of the bookkeeping and accounting services needed for your company. We specialize in small business accounting and would love to have a conversation with you about the options that are available: (888) 620-0770

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