You know the drill. Each time you issue a payment on behalf of a client—whether you use an online banking website, wire the money, or physically mail a check—you enter the payment information in your accounting ledger. Later, you reconcile the banking system with your ledger and address any discrepancies.
Entering information into the accounting ledger is not optional. You need to keep tabs on your clients’ businesses, maintaining up-to-date information on revenues, expenses, and cash available. The ledger is also vital for generating periodic reports, creating financial statements, and assisting with tax preparation.
The problem is that you’re not making just one payment here or there. Your firm is processing hundreds or thousands of payments every month. And the amount of work is only growing. If you take on a new client who has two or three different business entities, you might need to process 200 to 300 new payments per month, which means twice as many entries—for every entry into the banking system, you need to make a duplicate entry in your ledger.
Accommodating all that work can be labor-intensive. If you’re making entries manually, you might need to hire new staff members or—at the very least—pull your existing staff away from other tasks.
A manual duplicate-entry process is also error-prone. A simple data-entry typo means that your books will be inaccurate until you spend the time to find and fix the mistake during the reconciliation process.
So, how can you reduce the time and potential risks of a duplicate-entry process?
Eliminate duplicate entries with an integrated solution
An integrated solution that connects accounting and bank systems could eliminate the need for duplicate entries, reducing the time for payment processes and avoiding the risks of data-entry errors.
How would it work?
With the right solution, all payment and other banking functions are available from within the accounting system. To initiate a payment, you start with the accounting system, not the banking system. Within the accounting system, you can make an electronic payment, begin a wire transfer, or start the payment process in whatever other way you prefer. The payment is then approved, authorized, and pushed out all from within that accounting system.
There is no second entry to make. Because the payment is initiated from within the accounting system and executed directly through the integrated banking system, you don’t need to enter the payment information in a second location.
Reconciliation is automated. When the payment is disbursed and the payment clears the bank, the accounting system automatically clears the payment for you, whether you sent an electronic payment or a physical check
An integrated solution with this kind of “straight-through” processing can deliver several important benefits:
Less time-consuming work: Eliminating the need for duplicate entries can halve the time for making payments—and that’s a huge benefit when you are processing hundreds or thousands of payments per month. Automated reconciliation can save your staff additional time. Ultimately, this increased efficiency can help you add new clients without having to hire more staff.
Fewer errors: By avoiding duplicate entries, you can significantly reduce the opportunity for mistakes. Your books will be more accurate, and you can eliminate the time and effort required to find and remediate errors down the road.
Up-to-the-minute information: If your clients are considering a new purchase, payment, or investment, they need to know exactly how much money they currently have available. With an integrated solution, you and your clients always have up-to-the-minute account information on hand. Your accounting system includes every pending and cleared payment, so your clients don’t have to wait for you to reconcile accounts before they can make financial decisions.
More control, tighter security: A solution that is centered around the accounting system lets you maintain all of your internal controls and established processes for every transaction. Automated reconciliation also enables you to spot potentially fraudulent activity quickly, so you can stop payments and track down perpetrators fast.
Prepare for the evolution of payments
For many business management and accounting firms, the move from paper-based processes to electronic systems significantly enhanced the speed and efficiency of key financial transactions. Now it’s time to take the next step. By implementing a solution that integrates banking and accounting systems, you can eliminate the time-consuming, error-prone duplicate-entry process. As a result, you can make new strides in speed and efficiency while reducing errors and improving security.