Cloud Accounting and Bookkeeping – How to Transform Your Business to Save Time and Improve Efficiency

Introduction

In today’s fast-paced business world, time and efficiency are crucial factors that can make or break a company’s success. Cloud accounting and bookkeeping have emerged as game-changers, revolutionizing traditional financial management practices. In this blog post, we will explore how you can transform your business by leveraging cloud accounting, streamline your processes, save time, and boost overall efficiency.

Step 1: Analyzing Your Current Business Process

The first step towards embracing cloud accounting is to gain a clear understanding of your existing business processes. Take the time to document each step, starting from lead collection to post-closing tasks. Identifying these steps will allow you to spot potential areas that consume a significant amount of time or require improvement.

For Startups: If you are a startup, consider signing up for cloud accounting software such as Xero or QuickBooks. Begin using the platform for basic tasks like invoicing and payment collection. Assess your satisfaction with the software’s performance and, if necessary, seek advice from a cloud accounting advisor.

Step 2: Incorporating Bank Feeds

As you become more comfortable with cloud accounting and wish to expand its usage, the next step is to add your bank account to the software’s bank feed feature. This integration simplifies the process of categorizing transactions only in two categories: business expenses or personal drawings. The key is to ensure that you use the appropriate vendor names and apply the correct GST/HST rates.

By doing so, you will gain valuable insights into your business’s financial health, tracking income and expenditures accurately.

Step 3: Including Business Credit Card Transactions

Further enhance your cloud accounting capabilities by adding a credit card dedicated to business expenses. Similar to the bank feed, create a second bank feed for this credit card account. The process of categorizing transactions remains consistent with Step 2, which means you categorize the expenses in only in two categories Business or Personal. Additionally, learn how to match transactions within the cloud accounting software.

Step 4: Optimizing Cloud Accounting Benefits

Congratulations! You are now ready to fully benefit from cloud accounting. Continue using the software for invoicing while incorporating additional features such as:

1. Dext: Automate Accounts Payable for Increased Efficiency

Dext (formerly known as Receipt Bank) is a powerful tool that automates the accounts payable process. By snapping photos of your receipts or forwarding electronic invoices to Dext, the software automatically extracts relevant data and imports it into your cloud accounting platform. This streamlines the manual data entry process, saving your team valuable time and reducing the chances of errors. With Dext, you can easily keep track of expenses, categorize them correctly, and maintain a well-organized record of your financial transactions.

2. Bank Rules: Automate Processing of Recurring Transactions

Recurring transactions, such as monthly subscription fees or utility bills, can be time-consuming to handle individually. Cloud accounting platforms like Xero and QuickBooks allow you to create bank rules, which are predefined instructions that automatically categorize and process these recurring transactions. Once set up, the system will apply the appropriate categories and accounting treatment to these transactions, ensuring consistency and efficiency in your financial record-keeping.

3. Monthly Bank Reconciliation: Ensure Accuracy and Financial Visibility

Bank reconciliation is the process of matching your company’s financial records with those of your bank statements. Performing this task on a monthly basis is essential to identify discrepancies and ensure the accuracy of your financial data. With cloud accounting software, reconciling bank accounts becomes a breeze. The system automatically imports and matches your bank transactions, highlighting any discrepancies that need attention. By regularly reconciling your accounts, you can confidently rely on your financial reports for making informed business decisions.

4. Payroll Management: Simplify Payroll Processing

Cloud accounting systems often integrate with payroll management software, streamlining the process of paying your employees. This integration enables you to automatically calculate salaries, taxes, and deductions, saving time and reducing the likelihood of payroll errors. Additionally, cloud-based payroll solutions can handle various payment methods, such as direct deposits, making it convenient for both you and your employees.

5. GST/HST and Tax Filing: Seamlessly File Tax Returns

One of the significant advantages of cloud accounting is its ability to simplify tax compliance. The software keeps track of your business’s GST/HST obligations and automatically calculates the tax amounts based on your transactions. When it’s time to file your tax returns, the system generates the necessary reports, making the process smoother and reducing the chances of errors or missed deadlines. This ensures that your business remains tax-compliant and avoids any potential penalties.

6. Proactive Accounting Advisory: Expert Advice to Maximize Profits

By leveraging cloud accounting, you gain access to valuable financial insights in real-time. Cloud accounting advisors can interpret this data to provide proactive advice on optimizing your business operations and maximizing profits. They can help identify potential cost-saving opportunities, assess the profitability of specific ventures, and offer strategic financial planning to steer your business in the right direction.

7. Audit-Proofed Tax Returns: Prepare and File With Confidence

Preparing tax returns can be stressful, especially when faced with the possibility of an audit. Cloud accounting software ensures that your financial records are accurate, well-organized, and compliant with tax regulations. As a result, your tax returns are audit-ready, reducing the stress and burden associated with potential tax audits. By maintaining a comprehensive and transparent financial trail, you can confidently face any tax-related challenges that may arise.

Conclusion

Optimizing cloud accounting benefits transforms your business’s financial management, enabling streamlined processes, saving time, and improving overall efficiency. With tools like Dext and bank rules, you can automate time-consuming tasks and eliminate manual errors. Monthly bank reconciliations provide accurate financial visibility, while seamless payroll management ensures employees are paid accurately and promptly. Moreover, cloud accounting simplifies GST/HST and tax filing, guaranteeing compliance and reducing audit-related anxieties. With the support of proactive accounting advisors, you can make well-informed decisions, ultimately leading to increased profitability and long-term success for your business.

At Dexado Accounting and Tax we create value for our client’s businesses by optimizing their processes and offering timely reporting and advisory services that help them make better business decisions. Our services and offerings include Cloud Accounting, Cloud Bookkeeping, Small Business Tax Accounting, Tax Preparation, Tax Planning, CRA Audit Protection, Accounting Apps, Filing VDP Returns, and Custom Reporting.

We build relationships that become long-term partnerships!