Bookkeeping Workflows: How to Identify Inefficiencies (and Fix Them with Technology)

October 16, 2017 Victoria Hoffman

Bookkeeping Workflows

Workflow management is critical for accounting and bookkeeping firms, especially those looking to grow and become more proactive, strategic advisors to their clients.

Intuit defines “workflow” as “a defined sequence of tasks that is planned and repeatable”. By nature, most processes that are “planned and repeatable” can be scaled (i.e., become faster, more accurate, and performed more frequently) with the help of technology – especially processes that require a lot of manual tasks to be completed.

New developments in cloud accounting technology are making it possible for accountants and bookkeepers to scale their workflows and eliminate inefficiencies. But, how can you start to identify these inefficiencies and find the right workflow technology solutions?

People, processes, and tools

Embracing and adopting new technology is key for improving workflow efficiency. In the past, accountants and bookkeepers expressed concern that technology would make their roles obsolete. This simply isn’t true – humans will always have a place in the workflow process. Technology will simply help eliminate the need to spend time on tasks such as manual data entry, document collection, and so on.

Gabrielle Fontaine, founder of The Freelance Bookkeeper, said it best:

Some bookkeepers worry that if clients don’t need us to enter transaction data, then we’ll lose business. The reality is, it’s more like getting a promotion! While accurately entering data by hand does take a measure of skill that machines simply can’t duplicate completely, it’s not rocket science either. What’s happening is, the lower level work is being delegated to technology so that we can spend our time using more of our skills, getting more done in less time. Instead of being the worker bee, you get to step up to the manager role to assure that what automation is putting into the bookkeeping records is accurate and complete.

The most efficient workflows involve a combination of people, processes, and tools. Let’s take a closer look at how you can find the perfect combination for your particular workflows.

Mapping your workflows & uncovering inefficiencies

In order to discover the technology solutions that will help improve efficiency in your particular workflows, it’s important to think of your workflows first, then technology.

Start by mapping out your workflows. And when we say “map”, we mean it – physically draw them out! Take a piece of paper and actually outline your processes, step-by-step. See below for a very high-level example (taken from our webinar with Gabrielle Fontaine: Automated Document Collection for Accountants and Bookkeepers).

Bookkeeping Workflow Example

You can also use practice management software (such as Karbon) to help you document your workflows.

Mapping out your workflows will help you to a) highlight inefficiencies and opportunities for improvement, and b) select the right technology stack. Once you’ve completed your workflow map and pinpointed the stages that are ready for optimization, you can move on to the vendor selection process.

As a an example, Beyond Bookkeeping, a cloud bookkeeping firm, was able to map out their workflow into the following stages:

  • Document Collection
  • Document Sorting
  • Data-Entry
  • Payment Processing
  • Reconciliation and Reporting

To optimize their workflow, they evaluated the steps required to complete the stage, how much time they were spending on each step, and the current technology used (if any). From there, they were able to determine possible areas for improvement and start to research technology solutions.

(Read more about how Beyond Bookkeeping was able to successfully transition to the cloud and resolve inefficiencies in their workflows here.)

Choosing the right technology for your workflows

Remember back in 2009 when Apple’s iPhone 3G campaign boasted, “There’s an app for that!”?

Thanks to the cloud, the accounting industry is undergoing a similar revolution. There are a number of cloud applications available for just about every workflow. It’s up to you to determine which solutions will drive value for your business.

When evaluating a new application, ask the following questions:

  • Does the app replace or improve an existing process?
  • Does your accounting system endorse the app?
  • Do they have excellent technical support?
  • What data is being synced between the accounting system and the app?
  • How will the app scale with your business needs?

Buying a subscription for the first app you see might cause you to experience further issues down the line, and/or cause you to replace the app within just a few months in order to find a better solution. Tech vendor selection shouldn’t be rushed – be mindful of the workflow adoption curve.

The workflow adoption curve

As mentioned, introducing new technology isn’t going to magically resolve all of your workflow inefficiencies. It’s important to take the workflow adoption curve into consideration.

Workflow Adoption Curve

Before you can achieve workflow mastery, you must first test and adopt the workflow solution, then roll-out the solution to clients. Depending on the workflow, this process can take longer than expected, but it is critical for implementing more efficient workflows.

Adopting new workflows is a continuous process, and one that’s necessary for future-proofing your firm. Eliminating inefficiencies in your workflow processes will ultimately help you to lead your firm and your clients’ businesses to success.

Document your workflows using our free template. Download it now!

DOWNLOAD NOW

About the Author

Victoria Hoffman

Victoria is the Content Marketing Manager at Hubdoc. She is a graduate of the University of Toronto's Semiotics and Communication Theory program and has 5+ years of experience in digital marketing. She appreciates a fun pun and is always looking for a good book to read.

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