One of the most daunting tasks for any business is keeping up with the books. Let’s face it, outside if accounting and financial services, accounting procedures were probably not what made you start a business. However, not succeeding in this vital area can kill your company.

Here are 5 ways to help you improve accounting procedures.

Separate Accounting Responsibilities

Even if your business is small, you should have more than one person overseeing finances. This isn’t always easy with a very small business, but one way to make it work would be to put a non-accounting person in charge of something like opening mail and recording any checks or cash received. That creates an automatic redundancy you can use to double-check figures. Making one individual responsible for all of the accounting in a business increases the chance of fraud.

Limit Access to Financial System Information

Along with having different people overseeing the various aspects of your cash flow, consider safeguards that limit their ability to update information in your financial software. For example, make one person in charge of income and have a different employee oversee expenditures. Of course, the business owner should maintain full administrative control, but divvying up other areas so that no other person can see the entire process is another way to safeguard your systems from theft.

Increase Oversight

This sounds obvious, but it needs to be said. Look at your data. Review income and expenses. There are bill pay systems out there that can help, but monitoring variable costs are important too. Utility bill management software allows you to track energy use and save money. It's more than merely finding the best rate from a different vendor, knowing how and where your business uses energy gives you the chance to conserve on one of the significant costs of doing business.

Bring in a Third Party

It is always a good idea to periodically have a disinterested third party come into to review your accounting procedures. The word audit sometimes jangles people's nerves, but it is standard practice in many businesses and organization. As with most things these days, there are software options out there if you wish to take your auditing procedures high-tech.

Keep Tabs on Labor Costs

Paying yourself as well as other employees may be the most significant expense of a small business. In figuring this, it's important to keep accurate records of pay, overtime, and other benefits, so you don't over or under pay salary and taxes. Most experts agree, that while it might be okay initially in a small business to handle your own accounting, as the company grows, most people will want to consider automating the process. This can be done through in-house software such as QuickBooks, FreshBooks, or Wave.

Conclusion

The bottom line when it comes to improving your company’s accounting procedures is to automate, spread bookkeeping responsibilities among more than one person, track and oversee every aspect of the business.