A group of small business owners were asked, "When it comes to the bookkeeping process in your business, what's the single biggest challenge you're facing right now?" The number one response was time. The amount of time it takes to reconcile everything and the lack of time to spend reconciling everything.
By developing automated bookkeeping workflow processes, you can save both time and money. Review the following scenarios. As you read, think about whether or not your business has taken advantage of these automations. If not, why not? If so, then great! You're a step ahead of most.
All the hard work you have put in marketing to your target audience has finally paid off. A prospect notified you that he is interested in hiring you to complete his project. Hurriedly you turn on your computer and compile a proposal. You send your proposal in a matter of minutes with just a click of your mouse.
The client immediately receives the proposal, reviews it, selects a package, accepts and signs (digitally that is). Within a few hours you receive notification that your proposal has been accepted. Excited, but unbothered because you know that an invoice has automatically been created in Xero.
[ ] Prospect/Client info synced between all systems
[ ] Submission and Acceptance of Proposal online
[ ] Invoice created automatically
You log into Xero and approve the invoice, a reminder for payment is submitted to the client. The client sees your reminder email and is anxious to begin services, so they click the "Pay Now" button. Payment is made, and you are ready to get down to business. Not to mention, the received payment has automatically been applied in Xero and the client invoice no longer appears as outstanding.
[ ] Automated invoice reminders
[ ] Receive payments online through your chosen merchant processor
[ ] Payment automatically applied to invoice in Xero
You spend some time making sure that you have all of your systems in place so that you can best serve your clients. Being that this is the digital age, the tools that you use are cloud based so you can access them anywhere at anytime. Most of your cloud-based tools come with a monthly subscription. Each month you receive an emailed receipt confirmation when the funds are automatically deducted from your account.
You are thrilled that you have a document management system in place where every time you receive a receipt by email it is automatically forwarded to its appropriate folder within the software. The system is so smart that when it receives the copy of the receipt it recognizes the vendor, classifies the transactions, and pushes it Xero, where a spend money transaction is automatically created.
[ ] Online document management system
When you log into Xero to reconcile your account you're excited to see all of the transactions highlighted in green. You simply review and click OK. Seamless reconciliation process.
[ ] Automated transaction matching
Sometimes operating your business requires you to do things such as purchase office supplies, take a client out for lunch, pay for gas and parking. You don't want to lose the receipt so you whip out your smartphone, open your Xero app, and take a picture of your receipt. With a few simple clicks, you enter some basic information about the transactions and hit save. A spend money transaction is created with the image of the receipt attached, ready for the automated transaction matching.
[ ] Capture your expenses on the go
You're earning a pretty steady income and have made the decision to pay yourself a predetermined amount each month. You may be receiving it in the form of an owner's draw or a salary. You've also grown to the point where you have decided to hire some outside help. You hired an independent contractor and are being charged a flat fee per month to receive these services. You know you will have to issue a Form 1099-MISC at the end of the year.
To keep things organized you run all payments through your cloud-based payroll software. It allows you to pay yourself in the form of draws or wages. It also allows you to pay your independent contractor. You set your payroll cycle and turn on the automatic payroll feature. You don't have to worry about issuing W-2's 1099's at the end of the year, that will all be done for you.
[ ] Automated payroll process
[ ] Outsourced W-2 & 1099 creation
Once each payroll is run, the transaction syncs to Xero, creates a payroll bill and allocates the payroll expenses accordingly (wages, owner's draw, contracted services, payroll taxes). When the bank transaction clears, you can apply the payment directly to the payroll bill.
Now take a moment to reflect. Which scenario resonates with your business? Have you taken advantage of all of the tips and tools that can save you time and money? Have you taken the steps to automate as much of your bookkeeping as possible? Which process are you going to automate immediately?
Download 3 Bookkeeping Processes You Can Automate Without Add-Ons.
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