Why is it Important to Have Good Accounting Practices in Place?

Businesses thrive by maximizing profits and minimizing expenses, figures that are recorded using accounting. But what about when the process isn't being completed correctly? Having proper controls in place to track the overall accounting process is vital to ensure that your company's finances are being tracked properly. Here's a look at why it's important to have solid accounting procedures in place.

• Imagine a customer's paperwork is missing for an account that is now being contested. The new employee handling it was told to shred paper documents when they were done with them, but missed that they were supposed to scan them into the central database first because the onboarding process in accounting wasn't handled properly.

• Are you reconciling bank statements? It's of vital importance for your accounting accuracy. Is the subscription that you canceled still being charged to your business account? Did the teller make a mistake when entering your last deposit, showing only $1,584.32 instead of $15,584.32?

• Is Bob in sales claiming the entire meal on the receipt because it was to entertain clients, or just his portion of the meal because his entire family was with? Having practices in place for who is approving what expense for a cap of what amount is vital to making this process much easier.

• How is your accounts receivable being handled? If your accounting doesn't reflect your sales figures, there's something wrong. Keeping on top of bad accounts, partial payments or contracted price changes is vital to ensuring that your company will stay in business for a long time to come.

• If you didn't see that bill going towards debt collection, you really need to update your accounts payable practices. Making sure that all of the bills are being received by accounting and that they are paid on time ensures that your company can continue to profit instead of dropping money on fees.

By having good accounting procedures in place for your business, you can ensure that your company's finances will be well-protected against any number of potential issues down the road. If you're not quite sure exactly which practices to set in place for your company's needs, the experienced professionals at AccountRely can help. Please feel free to reach out today to get started.