If accounting is the language of business (thanks Warren Buffett), pre-accounting is the language of preparation.
Here’s what you need to know about pre-accounting to raise efficiency. By just giving it a little time and thought, you can save time and money, plus grow your business with better, more data-driven decisions.
Pre-accounting is a new concept, focused on getting your data ready for accounting. In other words, this is the often tedious work of searching through receipts or invoices, organizing them and typing all the data into a spreadsheet or software. And it starts as soon as a purchase is made.
Let’s say you buy lunch out for you and your business partner. Before you leave the table, you ask for a VAT receipt and stuff it into your coat-pocket. Traditionally, that receipt’s journey may look something like this:
It lives in your coat-pocket for a couple of days, until you rediscover it and leave it on your desk to sort out later.
It then gets buried under a pile of more paperwork.
Your accountant emails asking for this month’s expenses.
You find it, crumpled and coffee-stained, and send to your accountant along with a shoebox of paperwork.
The unloved, forgotten receipt is fetched out and read by your accountant.
They code it, enter data into the general ledger, and keep it for years in a cupboard.
You can make the life of you, your accountant and the receipt much easier and more efficient with pre-accounting technology. After all, it’s hard to get much value out of crumpled, coffee-soaked receipt balls. Why?
If you hold onto a receipt for weeks or months at a time, your books will not be accurate. This lack of real-time data may impact your decision-making and weaken visibility into your finances.
This also increases the chances of fraud within the company.
It increases the chances of forgetting the receipt by x%, leaving valuable items.
And that’s not to mention being incredibly time-consuming for you and your accountant. You need to manually manage and store paperwork, while your accountant will do a lot of heavy-lifting to turn that into data for a spreadsheet.
The good news is, there is an easy solution. And it may well lie in your coat-pocket. With a mobile phone, you can use a digital capture tool such as Receipt Bank to quickly and easy take photos of your receipts and expenses.
The new journey can now look more like this:
Take a photo of the receipt with your smartphone, using the Receipt Bank mobile app or camera, then upload to Receipt Bank.
Receipt Bank reads your receipt quickly and accurately, pulling the data your accountant needs.
Your accountant reviews this data and publishes to the general ledger.
Receipt Bank stores your receipt in the cloud for seven years to ensure compliance and accessibility.
Give your receipt a clean ending and add it to recycling. Good for you. Good for the world.
This method of instant document capture makes pre-accounting quicker and easier than ever. It also means more accurate data for you and your accountant. If you or your team frequently travel or work remotely, this is perfect to send information within seconds rather than days, work with international clients and scale your business.
This alone saves Receipt Bank partners an average of one hour per client per week. More time to give love to projects sitting on the back-burner, and maybe even leave early on Fridays.
In addition to the time-savings, this gives you more real-time, or close to real-time data with which to grow your business. Digitisation is confidence, knowing your data is exactly where it needs to be and when. Digitisation is not sitting at your kitchen table on a Saturday morning, exhausted and frustrated by piles of paper.
Learn more about pre-accounting and what it can do for your business today.
Download The Pre-Accounting Playbook Today