Computers can handle your bookkeeping much cheaper than a person so the more you can automate this process, the less you have to spend.
Automating your accounting process
One of the biggest considerations in automating parts of your accounting process, is to have a bank that works with your financial software. Choosing the right bank eliminates the manual process of having to input all expenses as the bank will automatically feed your software with the information. Having a bank that does not work with your financial software is too tedious and not worth the extra time you put in.
Some processes that can be automated are:
- Auto bill pay
- Auto debit
- Auto payroll
- Recurring invoices
- Bank Reconciliation/ data entry
Auto bill pay
Auto bill pay can be set up with most banks for free. With auto bill pay you log into your back to schedule your bills. Your bank mails the payment on your behalf. Bills that have the same amounts every month can be completely automated.
This is when you give your vendors permission to withdraw the amount you owe from your checking account or credit card during the subscription period. This relives you of the stress of having to remember when to pay. If using auto debit be sure to check your statements for charges. Sometimes, vendors can charge outrageous amounts and if you are not checking then you will not know.
As a single shareholder of an s corporation, you do not need to pay for payroll service. Your payroll can be automated using online banking. All you need to do is:
- Compute the net wages: The net wages is the amount you take home after taxes. If you need help computing net wages, you can contact me for help
- Schedule the net wages through online bill pay to go to your personal account
- Schedule the federal deposits on EFTPS.gov
- If you live in a state with state or local taxes, schedule the deposits on your state/local dept. of revenue
If you have clients that you charge the same amount monthly, you can set up a recurring invoice with your accounting software and forget all about it. Most recurring invoices have a way for customers to pay directly and automatically records the amount as paid in your software
Bank Reconciliation/ data entry
Rather than manually entering each expense you can use bank feeds as a means of entering missing information and reconciling your bank account. While reconciling, be sure to check for transactions you do not recognize. Any transaction not recognized should be investigated further. If all items are correctly matched, your should be able to see what items are outstanding by sorting by “reconciled items” in your financial software check register. The reconciled items should match your bank balance as of the reconciliation date.
Automating parts of your bookkeeping service, saves you time and expense. Even if you choose to outsource, your bookkeeping fees will be less because you automate.