How to Automate Bookkeeping for a small business
Automations are all the rage right now. I feel like I can’t glance at Linkedin without seeing someone comment about it. But when you are looking to automate bookkeeping for a small business, you need to be careful.
There are some things that can easily clear up your time and others that will create headaches for you and your accounting team later down the road.
In this article, I explain the different aspects of bookkeeping that you can automate and how to do so. Note that this does not mean that your bookkeeping is on a set and forget type of workflow. You still have to check for accuracy, complete monthly reconciliations, and make updates based on your growing business.
Key Takeaways
You can integrate several automations for small business bookkeeping directly inside QuickBooks
Create rules for consistent categorization
Use QuickBooks Payments to automate more of your AR and AP
Use a payroll service, like QuickBooks Payroll, to auto track your payroll
Make sure that your QuickBooks is connected to your third party softwares to make the most of your platforms
Automate monthly invoices and add card authorizations to automate payments
Even I can fall behind on bookkeeping essentials, but adding in some automations helps me keep everything on track.
Schedule a free consultation with me to discuss the best strategy for your business.
Categorization
The easiest part of bookkeeping to automate is categorizing expenses.
Start by categorizing manually, and when you have some consistent records to go off of, you can then set rules that automatically categorize transactions so long as they fit within the historical bounds you set previously.
But be careful here, if you have several overlapping categories (with a vendor like Amazon) or you want more in depth reports for types of payments, then you will need to only make rules for things you are absolutely certain are consistently under that category and vendor.
I also recommend having the rule made, but then checking the work through the QuickBooks Dashboard to actually confirm the rule. That way, the rules do the heavy lifting, but you always get the final say-so.
Learn more about tracking expenses and categorization in my article “What are the best methods for tracking small business expenses?”
Accounts Receivable and Accounts Payable
You can automate AR (Accounts Receivable) and AP (Accounts Payable) too.
AR shows the money that you are owed (think invoices) and AP are the expenses that you need to pay out to others.
There are ways that you can keep track of these two different types of bookkeeping through a third party software.
However, I recommend using QuickBooks Payments so that everything is all in one place and you don’t have to worry about random disconnections.
It is still important to do your own due diligence at the end of each month to make sure that everything has been received and paid appropriately.
Payroll
On the topic of using QuickBooks as a one-stop-shop, QuickBooks Payroll makes payroll automations a lot simpler.
You can of course use a third party payment processor or payroll provider, but check to see if they have an app that connects directly to QuickBooks so that you have your accounts automatically aligned for reporting.
You can send out payroll automatically, but always check that time sheets are accurate for pay stubs and that the taxes are taken out at the correct rate before publishing that automation.
I can even help you get set up with QuickBooks Payroll if you’d like, just set up a free consultation here.
Create Connections
Along with those automations directly within QuickBooks, you’ll want to connect any other software you are using back to QuickBooks as well.
You can connect your bank accounts, PayPal account, etc so that transactions are automatically imported to QuickBooks. Oftentimes, websites that take payments can also be integrated with QuickBooks (like Kajabi).
By integrating third party software into your QuickBooks account, you have now made it much simpler to reconcile activity from those external accounts within your books.
Invoices
Did you know that you can automatically generate invoices on a set schedule and send automated reminder emails to ensure you receive payment?
This is so helpful when you have consistent monthly clients for your services and even if you are not making those scheduled invoices every month, having those automated reminders really helps make sure that you get paid!
You can also consider having recurring payment authorizations, so that customers pay you automatically every month with their credit or debit card. Everyone loves making getting paid easier!
What Do I Do?
As a business owner, I need to do my own books too. But, just like I’m sure you are, I'm so busy with client work that I don’t have time to focus on my own bookkeeping.
That’s why I automate as much of my bookkeeping as I can.
All of my clients are on an autopay authorization system with me so that they don’t have to worry about making the payment and I don’t have to worry about tracking them down every month.
It is all processed through QuickBooks payments, so I get to see everything clearly and the same invoice is generated to complete the automatic charge.
Upon payment, QuickBooks automatically marks the invoice as paid and then records any fees that I am charged for using QuickBooks payments…all without me lifting a finger.
All I have to do is hit “confirm match” when the money hits my account!
Most of my expenses are recurring subscriptions that are on autopay and I use my credit card so I don’t have to worry about overdrafting by accident.
All these automations make doing my own books far faster and give me more time to focus on my clients!
Ready to talk about your small business bookkeeping?