9 Tips to Set Up an Accounting Department

An accounting department, either big or small, is the heart of any company. Numbers mean a lot for businesses’ success, so it’s highly important to keep the accounting dept as advanced as possible. Digiscorp.com experts shared the most reasonable tips on how to organize your accounting department to achieve top efficiency. 

1. Use Cloud Accounting Solutions

Cloud computing is a new era, and it’s already affordable for businesses of all sizes. Actually, most solutions are even cheaper than classic software. Using online custom accounting software, you can bring your company’s accounting to a new level as going to the cloud means instant information exchange and seamless collaboration. The information is also accessible from anywhere in the world regardless of the device you have at the moment. Finally, all the data is securely stored on servers, and you won’t ever miss a thing due to automated real-time saving and the detailed history of document versions. 

2. Use System Functionality to the Full

Once you have your accounting system set and running, you should squeeze as many benefits as possible out of it. Test run all the available features and keep using them if you notice at least a slight performance increment. It’s also wise to delete or rework the features that appear to be uncomfortable or useless for the system. Always keep in touch with platform providers to obtain essential fixes quickly. 

3. Reporting Means a Lot

A huge mistake accounting departments usually make is not reporting the figures to executives and individual departments. All the responsible figures in a company must be up to date to make necessary changes to the company’s workflow in time and avoid losing valuable opportunities. 

The accounting department must be clear to the executives and keep them aware of the minimum monthly profit needed to keep going and progress. Accountants also have to set limits for monthly expenditures to keep the company expanding reasonably without losing credit scores. 

4. Establish Ongoing Research

Laws and tax forms change all the time, as well as the entire market of accounting, which means it’s highly important to dedicate a set number of hours weekly to discover updates and implement them in your department. Regular updates should be implemented to make accounting less resource-taking for the company by boosting its overall efficiency. This will also open a lot of new opportunities for your business economy. Seize them all to be ahead of others in the industry. 

5. Select the Right Accounting Method

Here are the two accounting methods to choose from and their areas of use:

• Cash-basis accounting – this accounting system lets you record the actual amount of money that comes to the company’s budget and leave it. It’s best suited for smaller businesses that deal with immediate payments for services and goods. 
• Accrual accounting – this method involves recording income every time a sale is made, independently from when the actual payments reach the company’s account. The method is usually implemented by larger companies that need company profits and expenses on the monthly basis to have an idea of how much profit they generate. Smaller businesses can use it if they buy and sell goods or services on credit. 

6. Implement Automated Transaction Recording Method

Manual transaction recording is slow and involves the human factor, which means mistakes will occur here and there every year. Electronic transaction recording is quick and accurate as it doesn’t require human labor to accomplish routine monotonous tasks. The software can do it all for you. 

7. Keep a Chart of Accounts

It’s very important to keep different accounts for various business purposes. However, managing multiple accounts is also more challenging. That’s where a chart of accounts will help to keep everything in one place and allow accountants to keep an eye on balances more accurately. 

8. Establish Training Process

Modern e-learning and on-the-job training methods let you conduct regular employee training sessions to let them raise their efficiency without the need to look for courses voluntarily. It’s normal that employees don’t seek such opportunities and stick to the same workflows. It’s only the executive’s responsibility to push employees to learn in the most convenient way. 

9. Integrate Process Metrics & Reward Success

Every business is measurable through a wide range of metrics. It’s quite easy to identify them and use them to track the performance of the entire company and the personal performance of each employee. In a few months, you will be able to see target metrics and establish a system of bonuses for departments and employees if they exceed the target.

A Non-Stop Process

The most important thing to understand is that the company and its departments, including the accounting department, must be in a permanent development state. That’s what makes business hard and extremely rewarding at the same time. Keep implementing new things and you will always be one step ahead.