Bookkeeping can be a tedious process, and even more so for an engineering firm. You have specific project-based accounting needs that differ from many other firms like and this process can be time-consuming. On top of these lengthy bookkeeping tasks, you also have to ensure that you provide your clients with the high-level consultancy they expect from your firm.
Fortunately, we have come up with four improvements that you can implement to ensure that you are optimizing your engineering firm's bookkeeping processes. These will make you more efficient, ensure your books are accurate and up-to-date at all times and will save you a considerable amount of money as well. Here are 4 ways to optimize your engineering Firmn's Bookkeeping.
1. Pick the right accounting tech stack
One of the best ways to ensure your firm’s bookkeeping is as efficient as possible is by streamlining the process and eliminating the need for manual data entry. Choosing the proper software to include in your tech stack can go a long way in improving your processes and saving you time.
Some of the essential tools to include in your tech stack include:
- A cloud-based accounting software
You often find yourself working in remote locations, testing facilities, and on different job sites. Using a cloud-based accounting software program like QuickBooks Online can easily integrate with our other applications, like Dext Prepare, and allows you to access all of your financial data from anywhere and on any device.
- Dext Prepare
Using a program like Dext Prepare can significantly eliminate the need for manually entering data from your invoices and receipts. Dext Prepare extracts data from invoices and receipts using OCR technology and automatically categorizes and labels each line item. Plus, it stores all data in the cloud, eliminating the need for saving hard copies and leaving an audit trail.
Dext Prepare can integrate with your accounting software and easily export your expense data, speeding up the entire bank reconciliation process. It also has reporting capabilities, generating and approving expense reports so your team members can submit their expenses from their mobile phone, and you will receive a notification via email.
Maintaining a good relationship with your vendors is vitally important in business. An excellent way to ensure this is to make sure all payments are made on time. Doing so will keep you in good standing with your vendors and may also lead to early payment discounts or bulk discounts in the future, saving you a considerable amount of money.
A program called Plooto can help you streamline your payables process by integrating with your cloud-based accounting software. It makes it easy to view your accounts payable listings showing which vendors require payment and when. Plooto ensures that all of your bills are paid on time and helps you avoid any late fees or penalties.
Plus, if multiple people must approve a payment, Plooto will email them for full authorization first before electronically sending funds.
Not only will Plooto keep your suppliers happy, but it will also keep your cash flow visible, improve your record-keeping and give you the freedom to spend your time doing more important things than making payments.
2. Automate your receivables process
Automating your receivables process can go a long way in ensuring that you maintain a healthy cash flow. It keeps your clients paying on time and ensures that you are constantly updated with what is owed to you. If your firm has irregular work cycles, it can become vulnerable to cash flow fluctuations, making it even more vital that you stay on top of your receivables.
An easy way to do this is to generate invoices using your accounting software and send them to your clients via email. Stop using paper invoices as this can take much more time to send out, slowing down the entire receivables process. Also, ensure that your invoices are clear and concise, containing detailed line items, a list of payment methods, and payment terms. This will eliminate any confusion and can help your client pay on time.
You can also take advantage of automated invoice reminders. If an invoice hasn't been paid, automate reminders to send out a few days before the invoice due date. If payment still doesn't occur, make sure you follow up promptly and send out multiple reminders afterwards.
Rotessa is an excellent payment platform that can help eliminate the need for constant payment reminders. This program can schedule payments and automatically withdraw them from your client’s bank account using pre-authorized debit, speeding up your receivables process and improving your cash flow.
3. Outsource your bookkeeping
If bookkeeping is taking up too much of your time, consider outsourcing. Outsourcing will help you save a considerable amount of time and money. You will have access to a knowledgeable bookkeeper throughout the year that will ensure all of your financial data is current and accurate.
Staying up to date with your bookkeeping throughout the year means that you will be able to do proper financial planning. Your bookkeeper can help you monitor things like cash flow fluctuations, invoicing and billing, project costing, and other financial records that can occur with regular work cycles and can update you on any changes.
An outsourced bookkeeper can give you access to the latest accounting tools, they can save you a considerable amount of time and money, and they have the capability of scaling alongside your business, and it grows in the future.
4. Use a time tracking app
A time tracking app is necessary for tracking billable hours and non-billable hours. In an engineering firm, employee time makes up the majority of your COGS. To understand how much to charge your clients, you need to have a solid knowledge of your costs and create reliable estimates for the projects you are working on.
Ideally, you want a time tracking app that can integrate with your accounting software. This will allow your timesheet data to be automatically inputted in your accounting software and can be placed directly on the invoice prior to them being sent out to your clients. You also want to select a time tracking app that can integrate with your payroll software to speed up the entire payroll process.
QuickBooks Time is an excellent choice for an engineering firm’s time tracking needs. It can perform all of these tasks and more, making tracking your employee’s time and billing your clients a much simpler process.
By optimizing your engineering firm's bookkeeping process, you will save yourself a considerable amount of time and money. You will also ensure that you have constant access to data that is accurate and current. If you are looking for assistance in making your bookkeeping as streamlined as possible, Enkel can help. Contact us today to find out how we can help you.