Account for a Healthier Business

When you run a small business, you're in charge of everything - the marketing, the advertising, the product development, the sales, the hiring and firing, the paperwork and the accounting procedures.

If you can streamline a few of these processes, your business will not only run more efficiently but you'll also be able to focus your time and energy in places that matter, such as building relationships with your customers.

Here, we're looking at ways to improve your account procedures through specific steps and examples.

An example: The healthcare industry

One of the most complex industries when it comes to accounting is the healthcare industry. It's personal, the services vary and each patient's insurance policy varies.

The article "Will price transparency simplify healthcare accounting services?" discusses how being transparent with the costs upfront could help simplify accounting services.

Transparency in the healthcare field is difficult to provide - due to so many variable factors - but by being transparent upfront, patients are more informed and hopefully down the line prices won't vary so much from one hospital to the next.

The healthcare industry is just one industry that's looking to simplify their accounting procedures.

A few ways you can streamline your accounting process include:

• Keep up to date with accounts receivable - When you send an invoice to a customer, record it immediately in your books. When the payment is collected, make a note of it immediately. Oftentimes, small businesses struggle with accounting because they don't stay on top of their records. Instead of handling the accounting once a month, do it daily.
• Watch your inventory - While especially true in the food industry, inventory is applicable in most types of industries. Whether your inventory consists of eggs and potatoes or rental equipment for construction companies, you should keep track of it on a weekly basis. Note what comes in and try to get that inventory out before releasing new inventory. Live by the rule, "first in, first out."
• Be specific - Whether you're invoicing clients, sending payments out to vendors or keeping track of your inventory, be as specific as possible. You may think you'll remember what each transaction is for, but the reality is you won't. Keep lists, spreadsheets and detailed notes on all accounting processes. The more specific you are, the easier it will be to keep track of your accounting.
• Send out deadline reminders - Are you reminding your clients when they have a payment due? Or do you not even know what's due and when? By streamlining your accounting procedures, you will know what's due and when it's due and can then send out reminders one week before payments are due. Automate this system so you're not spending all of your time collecting payments. After all, you're most likely not in the debt collecting business.
• Don't let missed payments go unnoticed - Finally, if someone doesn't pay you even though you sent out a reminder, you should pursue it further. Don't let clients get away with not paying your for your products or services. Instead, send out a few additional reminders that the payment is due and if they still refuse to pay, take them to court. By being detailed with your accounting, you won't be scrambling to get your documents together.

Whether you run a restaurant, an online freelancing firm or a mom-and-pop coffee shop, get your accounting processes in order so you can focus on what matters.