Four ways to save money on your bookkeeping

Maintaining financial accounts is a necessary evil; at least that is how it’s perceived by many entrepreneurs within the small-to-medium business community. Nonetheless, accounting records contain a wealth of information that, when used in the right way, could readily help generate extra income. The way in which you carry out your bookkeeping or accounting can furthermore contribute to cost savings. Here are four tips to help you achieve this:

Tip 1: Work collaboratively online with your bookkeeper or accountant
Online collaboration is the ideal mechanism for identifying potential cost savings. By digitally exchanging information, including invoices and bank statements, you will cut out the physical process of collecting and sending these by post, thereby reducing the risk of error as manual input is minimised.

Tip 2: Carry out your invoicing online
The National Accounting Enquiry conducted in the Netherlands in 2010 found that almost 50% of SMEs with between one and 50 employees compose sales invoices using Microsoft Office applications such as Word or Excel, and I’m sure it’s at least this figure in the UK. In many cases, these invoices get sent to the accountant who then manually re-keys the information. By using an online accounting package, however, in collaboration with your accountant, the process becomes completely automated. Instead of creating documents in Word or Excel, you simply open your web-browser to efficiently compose an invoice in your own house-style. Debtor details don’t have to be input anew each time; neither do details of products or services provided. Instead, at the simple click of a button, the invoice is composed with all the relevant details and can either be printed or sent electronically. And, because your accountant uses the same online package, the invoice is received and details copied across to the business accounts automatically without any need for manual re-keying. An additional advantage is that reminders and debtor lists are automatically generated and updated as payments are made.

Tip 3: Link your bookkeeping to your bank
Bank statements become a thing of the past the moment you link your bookkeeping to your bank; instead, your self-learning online accounting system will be able to automatically process bank statements and reconcile them with your sales and purchase invoices on a daily basis. By processing bank statements in this way, both you and your accountant will save time. You will also both have greater insight into your business’s actual financial status and a real-time understanding of how well you are able to meet legal financial obligations such as .

Tip 4: Carry out simple bookkeeping tasks yourself
Keeping your financial accounts up to date can be a real task. Nonetheless, there are some elements of it that you can easily do yourself. One example is entering purchase invoices. Typically, you would collect your invoices and post them to your accountant who will input the details. If you carry this task out yourself, you will free up time for your accountant to then dedicate to supporting your business in a more qualitative way. A modern online accounting system can be set up to present conceptual information in such a way that the accountant can focus on checking and investigating; an efficient way of working together online while you retain good visibility of any expenditure incurred.

By following the tips as described above, in addition to making cost savings you will be laying the foundation for generating extra income; you will be more aware of your business’s financial status and thereby less likely to suffer unwelcome surprises or financial setbacks. In addition, you will create a situation whereby you can quickly react to changing market conditions. This new way of working offers a wealth of opportunity, even in relation to your bookkeeping. In the next blog, we will take a closer look at this concept. In the meantime, good luck!

Mark Davies
Country manager UK
Twinfield International