At the end of the year, after closing your accounts and completing your annual auditing work, don't you find yourself wondering how you could facilitate your routines so that the next year will be lighter and without unnecessary stress? Now you are going to check out 8 accounting tips that can make your new year more effective and leave part of your free time to resolve emergencies, avoiding overwhelming your daily routine.
1) Organize files
It may seem simple, but precisely because it seems simple, organization is a routine that is very easy to postpone. Organizing files, whether digital or paper, can result in a high reduction in waste in your department.
Although we are living in a digital world, there is still a need for paper files, especially to comply with certain laws. But there's room for improvement. Even though your department has reduced paper usage and, therefore, the need for large storage cabinets, check out what you really need to keep 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 do we go through this storage system and clean the files that we no longer need? Also, look at how you're 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 amount of time? Should some files be stored on the network for everyone to access? These and other questions must be answered periodically so that you can evaluate the best use of space on your computer.
2) Make a list of procedures
Much of our monthly responsibility relates to the month-end closing process. Take the time to analyze this process and before thinking 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 isn't performed by just one person, add duties and responsibilities to the checklist for a complete team list.
Once you've completed your to-do list, it's time to start reviewing the process. Ask yourself which of these tasks should be performed first and which depend on the completion of other tasks 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 may become a little more manageable.
3) Document policies and procedures
Many companies have excellent policies and procedures to operate on a daily basis, aimed at providing accurate and timely financial data. This data is important for managing 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, until the information is recovered.
It's essential to maintain documented policies and procedures. If your company has a policy and procedure manual, assign someone to review and update that manual, at least annually. Employee turnover is something that we generally overlook, but it can be planned, because it's inevitable in most organizations. That is why it is also important to train potential substitutes. The more people you have who are able to perform the functions of others, the more flexibility your organization will have. This will also allow you to transition smoothly during employee turnover periods.
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 can stick to the highest-risk accounts, it's probably time to think about using the necessary team to help with other tasks.
Like many accounting departments in small businesses, you may have a staff that is limited in number of people. Or you may 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 may be surprised how much some people appreciate contributing to the company and, at the same time, learning new tasks that can lead to new responsibilities.
5) Identify opportunities for improvement
Changes to closing routines can save a great deal of 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 “that's how we always do it”?
6) Anticipate and manage risks
This is an area where we suggest investing time upfront, rather than trying to review the fact and determine when and where the problem started. Small problems are always easier to diagnose and fix. In addition, by researching these items on a daily basis, you can identify other problems and risks that you can avoid in the future.
7) Interact with external professionals
While you prefer to handle your accounting-related issues internally, don't be afraid to contact your auditor if you encounter an unusual situation or 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 find that your accounting software isn't perfect, it's likely that it has several features that 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 where I could use this feature?
Also use 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 an 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 reconciliation, when the accounting software is probably equipped to execute.
It is also important to check that your accounting system is updated periodically, as many day-to-day problems are generated because the most recent version is not running.
Each of the tips above not only leads directly to saving time and money, but will also help you dramatically reduce work stress. By continuously analyzing the processes by which you operate, you can identify areas that can be improved.
TATICCA — ALLINIAL GLOBAL also provides integrated auditing, accounting, tax, corporate finance, financial advisory, risk advisory, technology, business consulting and training services. For more information, visit www.taticca.com.br or email taticca@taticca.com.br. Our company has professionals with extensive experience in the market and has certified methodologies for carrying out activities.
