Businesses have to learn to assess and review their processes regularly as well as adapt if they want to move their businesses forward. It is crucial that business clients and accountants come together to work during this time when support from the government has started to come to an end.
Traditional way of functioning often limits accounting departments. A mindset of ‘this is how it is done’ prevails as far as procedures are concerned. But when available accountancy services are used then the day to day financial operations can be overhauled for company’s benefit. Project accounting, financial processing, treasury management and the general ledger save staff costs, speed monthly closings, improve cash management and help a company become more profitable when these basics are revamped.
It is recommended that clients update their accounting systems so as to easily manage monthly earnings and out-goings. Following are the ways by which accountancy service in the UK can actually help to maximise profits and increase cost efficiency:
Accounts Receivable
Credit Management Improvement: Many companies take orders and then ship goods without properly conducting a credit check. For this the sales people get paid but they don’t do the collection of bills. And the delays in credit checks can bring about loss because of increase in the bad debt of the company. A company should opt for software package that would allow credit checks to be done during entering the order.
Accounts Payable
Simplifying processing of expenses: This can be done by asking the employees to submit travel and other expenses electronically with a pre-coded charge which removes the coding and saves time in future calculation. Electronic sheets help in reducing manual error computation.
Changing purchase order items vouchering: Valuable time of accounts payable staff is lost in reviewing invoices against insufficient purchase order information for verification when inventory, raw materials or supplies and services are bought. This problem can be eliminated when the employee or the department making the purchase is asked to issue important financial information like charge code, terms of payment, methods of payment and the vendor payment address.
Outsourcing consignment payment:Normally, an accounts payable clerk handles multiple pieces of paper to reconcile shipments and shipping documents and then manually keys in each freight bill. Usually multiple pieces of paper are handled by accounts payable clerk to reconcile shipments and shipping documents and then each freight bill is manually keyed in. There are many accountancy services in London that can help companies in time-sensitive payments like reconciliation performance, accurate charging of audit bills, doing remittance job and provide companies with regular feedback for automatic entry into financial records.
Using purchase cards for employee travel and small purchases: Multiple bills for small ticket items can be consolidated by the accounting staff into one check and numerous checks required for envelope stuffing, postage, and multiple vendors can be avoided.
General Ledger
Acquiring tax information at the time of processing source documents: A transaction must not be handled twice and it should be recorded once for both management and tax reporting purposes. This saves a lot of time and cost for businesses who frequently need management reports prepared.
Adopting a standard chart of accounts:The same list of accounts (receivables, payables, cash) must be used by every division, business unit and subsidiary of a company for general ledger. A more accurate reporting is ensured in the consolidation process when standardised accounts and account codes are used.
Monthly closing time reduction: As per the norm for many companies the monthly financial statements are published in the middle of the succeeding month and hence the top management is prevented from reacting on timely basis to changes in the business world. The accountancy services in London can help to revamp the financial system to shorten this lag. By taking their service the companies will not only reduce processing time in monthly closings but also get a huge cost saving.
Project Accounting
Setting up separate coding for project management: When the cost of an ongoing capital expense item such as building an addition to a company facility is to be captured, a separate coding for the project under accounts payable should be set up so that the integration of those costs to the general ledger is done easily. Handling a transaction twice is eliminated by such a procedure. And the accountancy services in the UK can come handy in solving such problems.
Treasury Management
Speeding up bank reconciliation: When the information on cheques cleared from the bank, daily rather than monthly, is wished to be downloaded by company depending on the volumes of cheques it writes, the daily routines is more manageable as the volumes increase at month ends. Such practices are adopted by the accountancy services in the UK and their assistance could speed up monthly closings.
Fixed Assets
Integrating fixed assets with general ledger: As it is thought to have a little impact on a company’s day to day operations, this system is overlooked during a review to modernise financial operations. The information for tax purposes, financial statements and depreciation is required to be traced by the accounts as demanded by fixed assets. On the completion of capital expenditure projects, they are capitalised as fixed assets that immediately begin to generate depreciation expense. The accountancy services in the UK help in the integration of those data subsystems with accounts payable and the general ledger, then fixed asset sub-system is updated that appear in the general ledger. Thus, finished capital projects become fixed assets in a timely manner and are not lost. One more task is eliminated from the monthly closings list due to such integration.
The financial operations of the companies can be streamlined and simplified by taking the accountancy services available in the UK and particularly the accountancy services in London. A lot of companies can benefit out of such modifications as there will be huge savings in staff costs and also improvement in financial reporting. Using such services can help get advice on areas of a business that will lead to profit maximising and cost efficiency
