Do you find yourself already thinking about your year-end accounting tasks, followed promptly by a mini panic attack? Is the thought of doing that catch-up bookkeeping you’ve been putting off all year looming over you like the mountain of receipts on your desk?
You’re not alone. Small business owners spend on average more than 10 hours a month working on the books of their business, or 120 hours per year. That’s a lot of time if you consider the thousands of other things already on their to-do lists.
In fact, according to research by Score, a small business education provider and mentor, 40% of small business owners say bookkeeping and taxes are the worst part of owning a business. As a result, it’s not uncommon for companies to postpone their bookkeeping tasks until year-end.
But now that year-end is fast approaching, the pile of receipts on your desk is only getting bigger and the panic attacks get more frequent. The good news is that advancements in technology mean that your year-end catch-up bookkeeping can be a much less daunting process.
Efficiency through Cloud Technology
Cloud-based accounting software, such as Xero and QuickBooks Online, has revolutionized the accounting industry, especially for bookkeeping. You can take the software wherever you go, so if you are in a situation where you can’t get into the office, you can easily log in from anywhere with an internet connection so you won’t fall further behind on your bookkeeping.
They are also designed with a strong focus on the user experience and therefore often come with a clean and easy-to-follow interface. All your data is conveniently organized and accessible from the cloud so no more frantic running around looking for that rogue receipt or invoice. The software would typically come with automatic bank feeds, saving you time from downloading statements manually. The ability for suppliers to send invoices (by email) straight into the accounting software allows the bookkeeper to easily fetch the invoice and attach it directly to a transaction making it that much easier to find.
Best of all, cloud-based accounting software provides a range of third-party application integrations so you can completely customize your bookkeeping process to your needs. There are tools for everything, from tracking receipts to accounts receivable follow up and cash flow management.
Integrate with your 3rd party apps
Plooto streamlines your AP and AR functions by automatically importing unpaid invoices and bills. It can be integrated with your accounting software and is able to fully reconcile reports within it. If you have any outstanding receipts or invoices, Plooto makes it easy to either quickly pay a supplier (with secure remittance details) or follow up with a customer.
You can clear desk from that mountain of receipts by using apps like Receipt Bank and Expensify. Simply snap a picture of the receipt through an app on your phone and it will automatically read all the data and file it in the cloud for easy retrieval. It can also be integrated with your accounting software, so you can save loads of time on manual data entry (on average 48 hours per year – that’s two days extra to tackle your year-end catch-up bookkeeping!)
A reliable catch-up bookkeeping process
New technology and third-party integrated apps made catch-up bookkeeping less of an ordeal but you still need a systematic process to get your books done on time. Otherwise, it will just be like clutching at straws to pull down the haystack.
The most difficult part is to find a starting point. Ideally, you want to start with your receipts and invoices. Go through your customer accounts to make sure you have all corresponding invoices and separate the ones which have not been paid. This will also allow you to analyze potential bad debt, which might be deducted from your tax return.
Next, do the same with your supplier accounts and find any bills that have not been paid. These will have to be processed ideally before year end if it relates to the current period.
Many small business owners do not keep a separate bank account from their personal finances. This can get messy, so the next step is to go through all the expenses and determine which ones were legitimately for business purposes and which ones were personal expenses.
Now we are ready to do some bookkeeping. Upload all bank transactions into the accounting software and code each of them to the corresponding financial accounts. This process should be much easier if you’ve already completed the above steps. Finally, make sure the bank balances reconcile to that of your accounts and you are done!
Contact us for any catch-up bookkeeping needs
If you’d rather not deal with any of this, and, like most small business owners, you want to focus your time and energy on running and growing your business, we can help to bring your books up to date!
At Enkel, we can help with your catch-up bookkeeping and streamline your bookkeeping processes through cloud-based technology and the right tools. Whether your company is located in Vancouver, Edmonton, Calgary, or Toronto we’ve got your bookkeeping needs covered! Contact us today to learn more.