Because up-to-date and accurate accounting will allow you to make decisions quickly!
Deposit Registrations on a Daily Basis
The simple fact to track revenues and register your deposits directly into your accounting system will allow you to detect errors and save time. Whether you want to enter a supplier credit or a customer payment, it will be impossible to collect money if billing is not done properly.
Why wait to make the corrections or to notify the person who issued the bill that there were mistakes? Your goal should always be to minimize future risks of errors and improve the accuracy of your financial information such as the customers’ remaining balance, the suppliers’ commissions balance, the amount of taxes to be paid, the travel agents’ commissions, the reports related to the consumer protection funds (if applicable by legislation) etc.
There are still many travel agencies that do not have cheques directly printed from the back-office system. Checks are still issued manually which significantly increases the workload.
Filling out the cheques manually, writing by hand the addresses on envelopes is much more time-consuming than automatically generating cheques from your accounting software.
Why not generate the cheque, post-date, mail and archive them.
This way, you will avoid overseeing documents twice as well as paying interests due to late payments. The manual cheque era is over as there are more and more options with banks for suppliers’ batch payments either through online bank portals or through preauthorized debit. If you subscribe to pre-authorized debits for 12 months in advance, you can track them as soon as you know the exact debit dates with the related amounts of money that will be debited from the accounts. This will allow you to easily detect the possible amount errors when making your bank reconciliation as well as making sure that the debit timeline was respected.
When making payments to your travel suppliers, you need to be able to anticipate potential errors. Does the cheque that I am currently issuing correspond to the balance due to the vendor? If it is not the case, how can you identify the differences and the source of the mistakes with your staff to avoid the same duplication of errors in the future?
At a certain time, you had to wait until you received the bank statements and the return of cheques statements by mail. Online access to statements and cheque copies facilitates the preparation of bank reconciliations. By quickly finalizing your bank reconciliations at the end of the month, it will help you to detect problems. A deposit is not present on my account, a customer’s cheque bounced, a debit has been applied on my account without being tracked in my accounting system, a cheque that I issued has not been debited by the supplier. Bank reconciliations that are made on a daily or weekly basis will help you efficiently manage your cash flow especially during difficult months.
The profit statement and the detailed sales analysis are key reports that will allow you to know the profitability of your company and to assess the performance of your staff. These reports have to be consulted on a regular basis in order to, once again, quickly make sound decisions and improve the financial situations if necessary (by motivating your staff to increase revenues or new sales targets or by reducing unnecessary expenses…). For a very detailed analysis, do not forget to generate the comparative sales report by agent, by product and by supplier!
All your staff does not have the same accounting knowledge or skills. Therefore, it is important to provide regular trainings to your staff or to consult with external accounting experts to minimize errors. Explaining to your staff why it is crucial to track particular transactions is a positive time investment rather than doing things by automation for them without understanding the how and the why.
The best methodology to make things change is to teach the best practices in the industry.
Good luck with your accounting optimization!
By François Lacoste, CPA, active user of TravelWorks software