How to Implement These 5 Best Bookkeeping Practices

December 16, 2022

Whether you’re a veteran bookkeeper or you’re fresh into the accounting industry, keeping on top of the best practices in the field is a must. With bookkeeping dominating the list of activities performed by accounting firms, holding 79% of total billed time, it’s important to look into new ways to streamline and improve your processes. 

Read on to discover 6 top practices that bookkeeping and accounting firms are implementing to stay ahead of the curve.

Building Audit Trails

No matter what scale books you’re handling, you’re still susceptible to random or scheduled tax audits, usually at a minimum of once every 5 years (depending on business location). While effective bookkeepers will offer little or no discrepancies in financial incomes and outcomes - there is always a small risk of inaccuracy. 

Keeping an audit trail of documentation for your client’s financial transaction is critical. Whether you choose to implement this practice through cloud-based software like Auditboard, or through your own traditional accounting methods, having constant access to the information removes the risk of non-compliance in the future.

Investing in Accounting Software

Accounting software comes in a wide variety of shapes and sizes. Making the move, if you haven’t already, to digital accounting methods can help reduce both time and human resource, and there are a wide range of actions that can be performed. 

Not sure what’s right for your firm? There’s a sea of options on offer, from the likes of small business focused XERO, to the larger enterprise focused Sage - and everything in between. If you’re thinking of taking the digital transformation leap in your accounting firm, be sure to check out what’s on offer through reliable review sites like G2. Plus, it’s good practice to take inventory of your existing systems, and check out how new software will integrate into your current ones to create a quick and efficient process going forward.

Backing up Financial Data

Backups for financial data are a must-have for accountants and bookkeepers alike. Backing up sensitive data for clients including account information, transaction history, payroll, expenses and more, can be used for proof in tax audits, and future bookkeeping processes. 

The easiest way to back-up your financial data is through cloud-based accounting software like Quickbooks, that stores data safely and securely, offering an additional Back-up and Restore solution that eliminates the risk of data loss or corruption from local server-side back-ups.

Cloud-based Automation

By now we’ve already referenced some of the more popular online accounting software solutions - but it’s important to note that whatever you choose will more-than-likely have an element of automation built in. Whether you’re sending invoices to your own bookkeeping clients, or you’re using the software on their behalf to track incoming and outgoing expenses. Automation can significantly reduce your manual input - decreasing the chance of the human error that accounts for 82% of data breaches within business.

 

Cloud-based automation is the perfect solution for remote-businesses, or flexible working too, allowing logins from anywhere in the world with a secure internet connection, and often offering optimised experiences for different devices too.

Creating Reports

Effective bookkeeping strategies go beyond taxation, and can have ongoing benefits for business strategy and future projections. Offering regular reporting through accounting software to your clients can be automated, and provide an extra level of depth in your bookkeeping service. Value-added bookkeeping, if you will. 

While many accountancy softwares like Oracle Netsuite feature in-built real-time reporting softwares with custom fields that you can tailor to your bookkeeping and client needs, it’s important that you set the frequency in which you would like to build static reports that you can share with your clients too. We recommend both monthly and quarterly reports are set up for a full 360° coverage of financial movement.

To sum up

These are just 6 of the best practices that accountancy firms are using to optimise their bookkeeping processes. 

If you’re interested in finding out more about the modern methods of bookkeeping, or you want to apply to become a member of INAA, and join our community of accountants, auditors, and consultants, visit our join us page today.