3 Ways to Reduce Your Accounting Expenses
Prices may vary due to inflation, and with such concerns, companies of all sizes must make prudent decisions about their expenditures. Fortunately, technological enhancements have made it easier to cut costs without sacrificing quality, efficiency, or effectiveness. Nowhere is this more true than in accounting, where many processes handled manually can easily transition to automation.
In addition, CFOs currently have too many responsibilities, making it harder to focus on things that can specifically improve the efficiency and effectiveness of their direct reports. But companies need to look at their accounting teams to ensure they are running lean and have eliminated unnecessary costs. Doing so will increase the overall health of the business. We give some pointers below.
Three ways to maintain low accounting costs
- Automate your reconciliations
High labor costs are associated with manually reconciling deposits and withdrawals as they happen. It requires an individual or team to constantly monitor transactions and then input them directly into accounting software, a process that can be done automatically through technology. All it takes is one interconnected system that can access banks, credit cards, and loan accounts, that allows it to extract information across those numerous data sources. The intelligent system can automatically categorize transactions and identify duplicate transactions and fraud. For instance, Cratoflow’s CratoMatch solution reconciles bank deposits and withdrawals as they happen, without human intervention.
How it saves money: Minimizes the number of hours a human needs to spend on reconciliation issues, avoids time-consuming categorization activities, and saves money by detecting fraudulent purchases that may go unnoticed by an employee. In summary, it saves labor costs and also avoids costly insurance headaches and a lack of trust in the brand from repeat fraudulent purchases.
- Reduce the cost of paying vendors
The cost of doing business means companies must pay multiple goods and services providers. Many times providers have different payment terms. Some companies still mail checks with direct physical costs in envelopes, paper, and stamps. Sure, one check doesn’t cost a lot, but when you extrapolate it thousands of times a year, the cost suddenly becomes a concern. Requiring humans to review payment terms and fill out forms with bank details only leads to delays, inconsistencies, and unnecessary work hours. In addition, some vendors accept terms more favorable to the payer if they are compensated quickly (e.g., net-15). And finally, it creates stronger relationships with those vendors, who are increasingly disinterested in working with clients who fail to pay on time. Replacing those vendors is often a costly endeavor itself.
How it saves money: Sending payments quicker can lead to more favorable terms (saving money) and avoiding duplicate payments before they occur saves unnecessary time trying to get that money back (not to mention potential litigation or sunk costs if the recipient refuses to return the money). And, as stipulated above, spending time and money on finding new suppliers is best avoided, especially if the existing one is providing great service.
- Optimize company costs through smart accounting software.
Simply put, a human is unlikely to get better at finding needle-in-the-haystack cost savings throughout the entire organization than an intelligent automated system. While your existing tools may present the numbers to employees, they may be unable to wade through them to find specific savings.
How it saves money: One of the company’s biggest challenges is maintaining accuracy in reconciling its transactions. CratoMatch is the best way to save time and increase accuracy, which is crucial for small business owners or departments. Repeat transactions can be scrutinized. Then man can shop and negotiate for better prices.
An underappreciated time suck is manually approving automatable costs and invoices. For instance, if you invoice a client the same amount periodically, the system can automatically approve and send those invoices. And if a vendor or supplier always charges the same amount, you can automate approvals and payments sent. In a recent survey, Smartsheet found that “36% percent of those surveyed wish they could automate getting sign-off or approval, and 30% would like to automate follow-up on their requests.”
Companies must carefully monitor every expenditure during times of economic uncertainty. By investing a little upfront in licensing an intelligent, automated AR system, you will reap benefits through long-term and lasting cost savings. Get started with Cratoflow’s no-code bookkeeping accounting software now; automate and revolutionize your financial operations.