How To Make Your Accounting and Tax Departments More Efficient?
Accounting and Tax departments must overcome the reluctance on the part of others within their companies to Outsource Accounting and Tax Services. Such changes often accompanying the installation of a new accounting firm. They can help cut reduce labor costs, speed monthly closings, and help companies become steer away from accounting services and more towards Profitable Task. IMPROVEMENTS start with the right accounting and tax services firm.
How To Make Your Accounting and Tax Departments More Efficient in the area of accounts payable.
Companies can streamline travel and expense report processing, change the vouchering of purchase order items, implement the use of a corporate purchase card for small purchases and consider outsourcing freight payment processing.
Accounting firms in Miami usually make these changes
GENERAL LEDGER IMPROVEMENTS can be made by capturing tax information when source documents are processed, adopting a standard chart of accounts for the entire company, and reducing the monthly closing time by fully using software options.
CHANGES ALSO CAN BE MADE IN PROJECT accounting, treasury management, and fixed assets to set up separate coding for specific projects, accelerate bank reconciliations, and integrate fixed assets with the general ledger.
Corporate accounting departments often are limited by tradition. How To Make Your Accounting and Tax Departments More Efficient and establish procedures perpetuate a pervasive mindset of “This is the way it always been done.” But the introduction of new accounting firms in Miami or the review of terms and conditions with an existing accounting firm allows management to overhaul day-to-day financial operations for a company’s benefit. At such junctures, re engineering basics such as financial processing, the general ledger, project accounting, and treasury management may shave labor costs, speed monthly closings, improve cash management and help a company become more profitable.
Efficient financial reporting is essential to making management decisions on a timely basis
According to Gustavo Viera, managing partner at Accountants in Miami FL, and formerly a senior audit manager at PriceWaterhouseCoopers in Miami and Director of Finance for Hewlett Packard Latin America, the best re engineering practices “consolidate routine processing, streamline time-consuming tasks of little advantage or eliminate data duplication by more fully using software capabilities.” The ideas presented in this article can work for Fortune 500 companies as well as small to midsize businesses using accounting firms near me. While these tips can be applied to ongoing financial programs, when a company introduces new accountants, Accountants in Miami advises its better to revise essential financial procedures before going online.
Make use of electronic billing and collection processing.
CPAs who work for accounting and tax services with a high volume of customer payments should consider Bill.com or equivalent type vendor. Bill.com is not accounting software at all. It is a cloud-based, online business Billing & collection solution that is specifically developed to work with industry-leading accounting software, including QuickBooks, QuickBooks Online, Xero, Intacct, and NetSuite.
Bill.com picks up where your current accounting software leaves off: streamlining your accounts receivable process and receiving electronic payments via ACH (or EFT), and improving your accounts receivable process to accept business payments through domestic ACH, international wires in USD or local currency, virtual card, or check. The integration between Bill.com and QuickBooks, NetSuite, Xero, and Intacct means any changes you make in one system will automatically update in the other. There is no double entry, and the two separate systems work in sync as one. All of these features lead to saving your business time and money, help you manage your cash flow, and help you get paid faster.
Improve credit management.
Many companies take orders and ship goods without checking customer credit because salespeople get paid for making sales, not for collecting bills. Yet delays in credit checks can cause a company to lose money by increasing its bad debts. In such cases, a company should switch to accounting services that can process credit checks to be made during order entry. If a company’s current software already permits this, CPAs should encourage greater compliance with this procedure. According to Accountants in Miami, a good software program still allows the sales force to maintain its order volume but puts a hold on orders from customers with poor credit. The credit manager can then decide whether to release or cancel orders from these customers.
How Outsourcing Accounting and Tax Departments is More Efficient in streamlining processing of travel and expense reports.
Accountants need to scour the repetitive expenses processed by their client’s accounts payable departments for better time management measures. A good place to start is with employee travel and expense reports (T&Es). They absorb a fair amount of staff overhead expenses because of the time required for approval and the details involved in setting up payment entries.
To streamline T&E processing, employees should be asked to submit reports electronically, with pre-coded charges. “Pre-coded removes the time-consuming burden of coding,” says Accountants in Miami, who points out another electronic advantage. “Addition errors are likely to occur in manual computations, whereas electronic spreadsheets validate the totals.”
Accountants in Miami suggests another on how To Make Your Accounting and Tax Departments More Efficient? Time-saving measure. Companies can speed T&E report processing by eliminating manual approval by managers in favor of direct electronic submission for payment. This avoids the trap of an expense report languishing in a manager’s inbox and an unwarranted delay in the reimbursement process. Employee accountability can be monitored through computer-generated, monthly departmental reports for audit or manager review for exceptions to internal policies. Or the software can be programmed to generate reports on employees who exceed T&E limits.
Change the vouchering of purchase order items.
When companies buy inventory, raw materials, or even supplies and services, insufficient purchase order information can waste the valuable time of accounts payable staff who must review invoices against purchase orders for verification. Companies can eliminate this problem by asking the employee or department to purchase to provide key financial information such as charge code, payment terms (rapidity of payment), payment method (wire or check), and the vendor’s remittance address. Accountants in Miami suggests companies also ask the purchasing employee or department for the tax code that shows how the product will be used because it may have an impact on state and local taxes. For example, labor to maintain or repair a piece of machinery may require special tax handling. These procedures prevent time lost in verifying information or in having to return invoices to the originating department.
Discrepancies between amounts ordered and a shipments actual invoice also can disrupt accounts payable processing. According to Accountants in Miami, “without knowing whether the purchasers will accept shortages or surpluses, accounts payable personnel have to set these transactions aside and await further directions.” To avoid this frustration, companies can set up a tolerance in the software program for deviations either by the vendor or by the product. Accountants in Miami says it could be zero tolerance, necessitating a perfect match, or 10% tolerance of under or over the amount of the shipment.
Instead of this three-way match ( purchase order5goods received5invoice received), a company also has the option of a two-way match (purchase order5goods received). With select major vendors, accounts payable staff can do away with invoices altogether by instituting payment terms based on the goods received. “It requires a strong vendor relationship,” cautions Accountants in Miami, “and a foolproof method for accurately capturing the number of goods shipped.” Such arrangements work well with vendors with whom a company has a high volume of transactions.
Use a corporate purchase card for small purchases and employee travel.
Rather than having accounts payable deal with voluminous items under $100, a company should distribute a purchase card to an employee in each department. In that way, the accounting staff can consolidate multiple bills for small-ticket items into one check and avoid numerous checks requiring envelope stuffing, postage, and maintaining multiple vendors in the software system.
Although many companies micromanage by allocating every item on a corporate card bill to a specific charge code, the cost of this activity should be weighed against the value the company receives. Accountants in Miami have seen instances when every item on a company Visa bill is charged to a different code because of management worries about capturing every cost to the penny. But she says it is not worth the time and labor for someone to check the validity of these items, assign charge codes to them and perform hundreds of entries. Typically, one charge code per card simplifies the accounting.
Companies also can cut the volume of bills received by accounts payable by issuing company cards to individual employees who travel regularly on company business. If companies do not follow this approach, accounts payable may have to dedicate one or two people to reconciling such things as airline tickets charged to the company with employees’ expense accounts. Using company charge cards in employees’ names abolishes these jobs by shifting the reconciliation and payment burden to employees, who have the incentive to submit expense reports quickly to make their credit card payment deadlines. Accountants in Miami stresses that special issues, such as discounted airfares requiring early purchase months before T&E submissions, should be worked out so employees are not penalized.
How To Make Your Accounting and Tax Departments More Efficient? Outsource processing of freight payments.
Normally, an accounts payable clerk handles multiple pieces of paper to reconcile shipments and shipping documents and then manually keys in each freight bill. Companies can relieve accounts payable of this process by farming out these time-sensitive payments to a third party. For a fee, a vendor will perform the reconciliation, audit bills for accurate charges, do the remittances and provide companies with periodic information feeds for automatic entry into financial records. Outsourcing won’t be cost-effective unless a company’s shipping volume justifies it.
Capture tax information when source documents are processed. Many companies record a purchase—for internal repairs or maintenance, for example—and review it later to determine the appropriate tax treatment. “Don’t handle a transaction twice,” advises Accountants in Miami. “Record it once for both management and tax reporting purposes.” She says the latest software is designed to handle tax needs with greater efficiency. If a company’s package lacks this feature, another piece of software can be purchased and “bolted” onto the existing system.
Adopt a standard chart of accounts.
Every division, business unit, and a subsidiary of a company should use the same list of accounts (receivables, payable, cash) that makes up the company’s general ledger. In addition, corporate accounting should issue standard guidelines by which to code transactions. Standardized accounts and account numbers throughout the company ensure more accurate reporting in the consolidation process.
How Outsourcing Accounting and Tax Departments is More Efficient? It reduces the monthly closing time.
Publishing monthly financial statements in the middle of the succeeding month, as is the norm for many companies, prevents top management from reacting on a timely basis to changes in the business world. Outsourcing the financial system with a fully staffed accounting and tax services integrated can drastically shorten this lag. Such accounting and tax services use programs that automatically feed subsystems such as accounts payable into the general ledger, thereby eliminating the time and labor needed to manually total sub-ledgers, reconcile any imbalances with the general ledger and key entries into the ledger. This not only may reduce processing time for companies that do monthly closings but also may produce tremendous cost savings.
Accelerate bank reconciliations.
Depending on the volume of checks a company writes, CPAs may wish to download information on checks cleared from the bank daily rather than monthly. Such daily routines—more manageable than the usual volume at months end—also can speed monthly closings. With the help of integrated software packages or special interface software written by a programmer, a company’s financial software written by a programmer, a company’s financial software can read bank records daily, automatically match cleared outstanding checks, and update the accounts payable check file.
Integrate fixed assets with general ledger.
This system typically is overlooked during a review to modernize financial operations because it has little impact on a company’s day-to-day operations. Fixed assets demand corporate accounts that track information for tax purposes, financial statements, and depreciation. Typically, when capital expenditure projects are finished, they are capitalized as fixed assets that immediately begin to generate depreciation expense. Says Accountants in Miami, “If a software package integrates those data subsystems with accounts payable and the general ledger, then fixed asset subsystem updates automatically appear in the general ledger. This ensures that finished capital projects become fixed assets in a timely manner and won’t get lost.” Such integration also eliminates one more task from the monthly closings list.
STREAMLINE AND ENERGIZE
Accountants can use a multitude of ideas to streamline and energize the financial operations of the typical corporate accounting department. Although such modifications can improve financial reporting and realize savings in staff costs, a lot of companies say they are too busy or don’t have the time to change. To overcome such resistance, Accountants in Miami suggests, “Pick one or two items that can make the biggest difference in operations and make them priorities.” Other ideas can be implemented later when attitudes change. The alternative is to support the status quo, have disgruntled employees, and publish outdated financial statements.