4 Tips for Spring Cleaning Your Business
There’s no better time than the Spring to declutter and prepare your business for growth. Spring gives us a feeling of renewal and nudges up to make positive changes. For business owners, this should urge us to spruce up the processes and procedures of our business — while also getting a clear view of what’s not working.
Here are some easy tips to help you get more organised before the summer:
1. Go paperless
Is your office buried in paperwork? Take the time to clean house and consider going paperless. Continuing to use paper for things like billing, checks, and proposals is more time-consuming, increases the opportunity for risk, and can cost your business more money in the long run. There’s a big pay-off to going paperless in your business and its an important first step to really getting your finances in order. By reducing your reliance on paper, you’ll see reduced expenses, improved efficiency, and added security.
Bank and Credit Card Statements
Chances are you’ve already adopted some form of online banking for your business. Why not take it a step further by opting out of paper entirely and getting into electronic bank statements, check copies and credit card statements? Most major banks and credit card companies offer a host of services that are managed and executed online in their entirety.
Pay Day Paper
Billing customers can be a massive paper drain — especially when detailed invoices and return envelopes are included. Help your business go green by switching this process to a paperless option. It comes with the added benefit of drastically reducing the time from invoice to payment — giving you a better handle on your cash flow.
Payroll is another area where you can go paperless and rack up those savings. Encourage your employees to submit their work hours electronically and get paid by electronic transfer. Additionally, using an electronic payroll system also offers employees the opportunity to review payslips, change deductions etc. with a single click, dramatically reducing paper costs.
Spreadsheets and Financial Reports
If you really want to get serious about going paperless, move your business to a cloud-hosted accounting system. You will immediately see a difference in the amount of paper moving in and out of your office. These web-based accounting systems give you the ability to manage your entire bookkeeping operation remotely, so you can access and distribute financial reports from your laptop, or even your smartphone.
2. Review all outstanding invoices
Managing your credit and collections on a regular basis is essential to your company’s financial health. And, in addition to regularly reviewing your outstanding invoices, it’s important to take the time and do a “deep clean” of your accounts receivable. As a best practice, this should be done as a monthly review but, if you can’t remember the last time you did a deep cleaning of your accounts receivable, it’s time to get a handle on this.
Use your accounting system to run reports and pull every unpaid invoice for the year-to-date. This report will offer you a quick snapshot of the list of customers who have outstanding invoices. You can quickly see which customers owe you money when the invoice was due as well as the amount due. A report of your outstanding invoices also allows you to monitor those clients/customers who take too long to pay and helps you to make sure you get those payments. The total tally of money owed to your business at the end of the report should be motivation enough for you to spend the time and effort to ensure you’re on top of managing cash flow!
3. Review your service agreements
It may sound obvious but this is a task that is often overlooked. It’s so easy, especially with automated bill-pay and credit card payments, to forget to review your agreements with vendors and suppliers. And it may seem like a relatively unimportant task when most or all of the bills are being paid on time. However, if you do not stay informed on the details associated with these agreements, you may encounter unpleasant surprises down the road.
For example, there may be an expiration date for discounts – you might be paying the promotional period rate for a specific service without realising the cost will increase significantly in a few months. Or a vendor may have taken away deliverables from his or her services while continuing to charge you the same fees. Take note of expiration dates or charges that are not fixed. Set time aside for reviewing existing service agreements; and if you notice specific terms that could change in the near future, make a note and contact the service provider to see if you can negotiate a better deal.
4. Ensure data integrity
Many small and medium-sized businesses use a digital accounting solution. While these account packages inherently do a good job at keeping all of your financial data backed-up, occasionally something happens (i.e. human error, a system bug, a power surge etc.) that can potentially corrupt your data file. Have your Bookkeeper do a thorough review of your files and make sure they are backed up completely and regularly.
Keep in mind that software support services will eventually expire for many outdated versions of accounting software and making sure you stay current is essential. That way you’re not left in the dark if a problem does occur with your file.