Clerical errors are unfortunately common, but they can be avoided if you have the information you need to actively prevent their frequency. These mistakes can be costly, either with minimal effect and relatively easy corrective measures, but some are very serious, with considerable impacts which can affect your business for a long time.
It is important to remember that getting it right the first time is always faster than having to correct a problem. Studies suggest it is also more cost-effective to search out potential issues early in a project, as opposed to going back over the work at the end to correct anything later.
To help your business avoid losses in time, money, and possible legal issues, here are top ways to reduce clerical errors.
Careful data entry. Mistakes in data entry are one of the top errors for businesses. Of course, there is no foolproof way to eliminate all risk of error, but there are many steps you can take within your company to lessen the frequency of issues. Run consistent bank, accounts receivable, and payable reconciliations, and be sure that any unusual activities or transactions are reviewed for accuracy. Be sure to include policies which state that reconciliations must be performed regularly so that all of your entries are scrutinized continually for errors and inaccuracies. This is an excellent way to stay on top of any potential issues before they cost your firm money. Careful record-keeping and its subsequent analysis on a regular basis is the first step in reducing errors.
Set a budget. Another hugely important step for reducing clerical errors in your business is to set a budget before each project, and for each fiscal year. Know how much the whole project is estimated to cost before you begin so that you can keep as close to that budget as possible. You don’t want to be caught unaware by purchasing more than necessary because you didn’t think ahead, and allowing your spending to spiral out of control. Stay on track with your costs and avoid overspending by clearly establishing your financial objectives. Your budget will allow for some wriggle room, but it will keep accounting errors less likely if you stick to its parameters during your projects.
Don’t fall behind. Balancing your books can seem less productive than other aspects of your business, but if you keep on top of your records and invoices, you will save time and money from the onset. Make it a regular part of your working day to include as little as fifteen minutes to be sure that all of your data is being recorded.
Perform timely reconciliations. Reconciling all of your account balances is critical to your company’s success. This process needs to happen at least once a month to be beneficial and to ensure that any potential errors are caught and corrected before potential catastrophic financial implications. Accuracy is crucial, and by putting these measures into place there will be little room for mistakes, because you will be consistently able to identify any potential issues early. Benefits of reconciling include: catching bank errors and potential fraudulent activity, knowing how much money there is available at any given time, and checking to see when and how your customers have paid.
Outsource. There are many ways and methods to outsource some of your accounting work. In-house accountants were once the most common way to help businesses delegate and ensure that financial information was being handled by an expert. Improve your finances by using Invoice Tracker. You business will see instant benefits from its reliable reporting, which will allow you to see the status of your outstanding invoices at all times. Your clients will be able to pay instantly online, from links which are inserted into their invoices, and the reconciliation feature means that the moment you receive payment, the collection will be stopped. With your data synced every few minutes from your accounting software, there couldn’t be an easier way to outsource your accounting needs and to feel secure that all of your accounts are accurate and up to date.
Now that you are aware of the risks and the steps to avoiding them, you can keep clerical errors and liability issues to a minimum, with careful management and a plan which utilizes these actions.
Try Invoice Tracker today with a free, 30-day, no commitment trial. Check out how much faster your invoices are paid, and how much time and money you save on invoicing.
