Companies are legally obliged to post accounting entries. This provides the tax authorities with information about the company’s finances, but it is also a good performance and monitoring indicator for the company itself.
In this article, we give you three tips to help avoid surprises when entering your purchase invoices, sales invoices, bank statements, VAT declarations, tax notices or payroll journals!
Follow a clear validation circuit for expenses and purchases
Following a clear and precise validation circuit for expenses and purchases is essential for posting correct accounting entries. This internal control process guarantees the compliance of your procurement processes and allows you to approve and then validate purchases of goods or services.
The validation circuit for expenses and purchases comprises four steps:
#1 – Transmit purchase requisitions to management
Your employees should state their requirements in concise specification documents. These documents provide key information about the requirement in question: short description, date required, department concerned.
#2 – Identify approvers
The number and profile of decision-makers is not fixed, as it depends on the type of purchase, its amount, and the department concerned. This approval chain is simplified when it is part of a digitized procurement process: purchase requisitions are automatically sent to the approvers who then accept or reject them.
#3 – Configure approval settings
Management should define different levels of authorization and approval conditions in the form of expenditure thresholds. These approval flows must be able to adapt and to redirect information to the right person – if a decision-maker is absent, for example.
#4 – Track requests and approvals
Tracking the entire procurement circuit allows you to verify that the process is satisfactory and to show that a purchase is compliant, during audits or disputes for example. Moreover, guaranteeing the traceability of all your accounting flows and ensuring that your operations are transparent will significantly reduce the risk of errors.
Organize and archive accounting documents
Put this organization in place gradually so that you aren’t completely overwhelmed when it’s time to post your accounting entry!
For example, use a three-part presentation for your purchase journal:
- A supplier account: enter the amount payable, including VAT, on the credit side;
- An expense account: it must show the amount, excluding VAT, of the overheads or the purchase on the debit side;
- A deductible input VAT account: enter the VAT amount on the debit side.
Digitize your business
Using solutions that allow you to move to paperless accounting documents and to automate certain actions will be particularly beneficial. You will quickly notice real-time savings, and will be able to avoid low value-added tasks.
In addition, all purchase and sales invoices, as supporting accounting documents, must be kept carefully for 10 years. Depending on your business sector, this can mean dozens, or even hundreds, of paper documents! Digitizing your accounting processes is therefore crucial to make your life easier, both in terms of archiving and in the event of an audit – it will be easier to find your documents.
For expense report management, a simple answer is to use a solution like N2F. This expense report management application almost makes accounting entry fun! Employees don’t need to keep all their receipts in their bag anymore. A simple photo can collect all the necessary information. The person declaring the expense can add extra information if needed (project or client name, for example), before submitting the travel expenses for approval and payment. The expense is then accepted or rejected. And that’s it!
And with a stated timeframe of less than 5 seconds for entering an expense, this application will quickly become indispensable!
In addition to reducing errors, digital technology saves time and improves your company’s productivity and your employees’ well-being, allowing you to enjoy stress-free accounting entry!
Would you like to know more? Contact us now!