When I ask business owners what the most painful part of their accounting is, a good majority of you undeniably say that it has to do with the pile of papers that comes along with it as your accounting is often messy, disorganized and inefficent.
Lucky enough, this trend can now be reversed as paperless accounting is certainly possible by following a few simple methods.
Having paper all over the place leads to inefficiencies since we need to organize this paper, file it, locate it once we need it & hand it off to whoever might need access to it. By getting control over the paper in your accounting, you will be able to realize efficiency gains which results in time saved and increased focus on the tasks that bring value to your business. Let's take a closer look on how we can bring you one step closer to paperless accounting goodness.
Implement an app for receipt management
I have written about this before, but essentially, in order to eliminate paper from your accounting, you would need to get a handle on all those little bits of paper that you might be collecting in a shoebox.
The traditional process entails collecting all of these annoying receipts and entering them into your accounting system 1 by 1 yourself or handing this off to your bookkeeper to enter themselves. I even know some business owners who have gone as far as to print out electronic copies of their invoices just to hand off to their bookkeeper. Whichever way you go, these methods resulted in massive inefficiencies.
The better method is to implement an app that can streamline the process of entering these receipts into your accounting system. In order to do so, you would first need to be setup on a cloud accounting system (click here if you want some direction on that).
Once that’s done, you then want to select an app that can capture receipts and expense items on the fly easily and store them in an electronic format that can then be accessed by whichever party needs to. There are plenty of apps that can do this, but you want to choose an app that can interface with your cloud accounting system. This is where the real efficiency gains will come into play.
Apps that we really like are Receipt Bank and Hubdoc. Each of these will allow you to snap pictures of your paper receipts or forward any already electronic receipts directly into the app. From there these items can be pushed directly into your cloud accounting system. The real beauty in these systems is that everything is achieved without a bit of paper changing hands. It’s a lot more organized & it saves you a bunch of time.
Communicate to your vendors that bills should be emailed
Some businesses still receive a lot of paper in the mail. I’m not sure why paper bills are still being mailed out, but for some reason they are. This paper then accumulates somewhere and will get handed off to the appropriate party to enter into your accounting system or worse, it gets lost. Again, either way, the process includes inefficiencies.
Any vendor that continues to send you bills in the mail should be contacted and told to start sending these documents to a particular email address of yours.
Once received in your inbox, you can simply forward the bill to your receipt management app like Receipt Bank. Better yet, you can set some auto-forwarding rules in your email account to send that directly to the app. Even better than that, Hubdoc’s main differentiator is that it can automatically go fetch certain invoices for you without you having to forward it at all.
None of this is possible if you’re vendors of sending you paper in the mail however, so try and reverse this trend by letting them know that you no longer want any bills in the mail.
Get paid for everything electronically
Stop accepting checks. Like, right now.
There are plenty of other ways that allow you to get paid without having to wait for payment to come in the mail and without having to displace yourself to deposit a piece of paper at the bank.
Determining which methods of accepting payment in your business can depend on the way that you invoice, but generally speaking, if you have a cloud accounting system setup, you can invoice directly through the system and link Paypal or Stripe as payment gateways and have your customers pay you using Paypal or credit card.
If you’re looking to avoid some of the fees associated with this method, then you can also opt to choose to have customer pay you via email or electronic bank transfers.
If you’re in the tech space, I would also seriously consider starting to accept bitcoin as payment. You can check out my article on why you should consider accepting bitcoin in your business by clicking here.
Lastly, if you accept recurring payments from customers, there are certain apps out there that can automate the collection process and make it super easy for your customers to pay you via pre-authorized debit which is controlled on your end. All they need to do is fill out a quick online form at the onset and you will be able to schedule recurring payments with exceptionally low fees. This is what we use at Xen Accounting.
Cutting out accepting checks means cutting out the paper and inefficiencies that come along with it, so I would recommend following the method as described.
Pay for everything electronically
Again, there is no reason to be writing checks in this day and age. Stop sending pieces of paper around in the mail. I can’t believe we still do this!
By paying your bills electronically, you can eliminate the paper that comes with it.
Methods to pay for things electronically include sending payments direct from your online bank account or using an app like Plooto, which essentially allows you to directly send payments electronically after a quick vendor setup. Plooto, for instance, links directly to your accounts payable in a cloud accounting app like Xero or Quickbooks Online which then allows you to easily pay the bills that are within your accounting system.
This is yet another way for you to eliminate paper in your accounting.
From time to time, you might be required to sign certain things when it comes to your accounting. Maybe it’s your financial statements, tax returns or any other documents that your accountant might be preparing for you.
Why displace yourself when you can sign something from the comfort of your own home or office? Driving around just to sign something is crazy. And what do you need a paper copy of these documents for?
By switching to e-signatures, you can eliminate all papers that might come your way from your accountant (which could be a lot!) and you can save some time from displacing yourself as well. There are plenty of apps that can do this, however we use Rightsignature at Xen Accounting which is well worth the monthly amount that we pay for it.
The road to paperless accounting is possible
By taking a few simple steps, it's entirely possible to have paperless accounting. As an example, we are an accounting firm that literally has no paper at all in the office. If we can achieve paperless accounting for every single business that we work with, then I'm pretty sure you'll be able to achieve it as well.
Buck the trend and eliminate paper in your accounting today. You won't turn back.
About Xen Accounting
Xen Accounting is a virtual accounting firm designed for modern day small business owners with one goal in mind: to improve your quality of life with awesome accounting. Through technology and a forward-thinking approach, Xen Accounting is focusing on delivering professional accounting services for businesses in the digital age. To contact Xen Accounting, please email [email protected]