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Best Practices for Effective Accounts Management

Accounting and finance management is key to navigating businesses. If you are not accurately aware of where your business money comes from and where it is spent, there is a real risk of losing control of your business. The probability for potential business growth only increases if you manage your business income and expenses effectively. So you need to know about accounts management properly.

There are two job titles associated with accounts management, the Accountant and the Account Manager. Both roles are necessary for sound business management. Account managers play a vital role in building and maintaining strong clients/customer relationships and strategic partnerships that extend beyond the original sales. In contrast, an accountant’s job is to maintain the accounts of customers or clients.

Thus, the key to the success of your business lies within accounts management. Incoming and outgoing cash management will help you make better decisions. And moving forward, the accuracy of your accounts will help you avoid financial blunders. The time you spend on analyzing and managing business accounts will make your business more profitable and efficient. 

In this guide, you will learn how effectiveness leads to business growth. You will also learn about some best practices that will help you in effectively managing your business accounts.

Table of content

  • What is the difference between accounts management and effective accounts management?
  • Why accounts management is important?
  • How to manage accounts effectively?
  • Account management tools in 2022
  • Why use software for accounts management?
  • 7 best practices for effective accounts management
  • Key takeaways
  • Conclusion

What is the Difference Between Accounts Management and Effective Accounts Management?

Accounts Management Effective Accounts Management
Account management is the daily management of customer’s accounts. Management of customer’s accounts in a way that makes them want to continue their relationship with your business or company.
It is the extension of the sales process and starts after-sales transactions. It starts right after a complete sales transaction. 
Focusing on accounts maintained and managed. Focus on nurturing of client/customer relationship
Business results and customer satisfaction Secure long-term customer/client partnerships and loyalty.
Monitoring and managing performance. Reduce conflicts and friction for clients by decreasing complexity.
Helps in decision making. Transparency in accounts helps make better decisions.

Why Effective Accounts Management is Important?

Well, without accounts management, you could not leave money openly on your counter table. Without it, you could be helpless to possible competitors’ threats and put most of your valuable clients/customers at risk of defection. Thus, managing accounts effectively is so important and is a critical step. This helps optimize business performance and secure your business revenue growth.

Here are the key reasons for maintaining and managing accounts. 

  • Keep financial records
  • Avoid legal problems
  • Make a budget
  • Analyzing Performance
  • Developing strategies
  • Better information
  • Better control
  • Grow business
  • Improve cash flows
  • Tax planning
  • Business growth
  • Credibility and trust
  • Decision making

How to Manage Accounts Effectively?

Account management is an essential and key process that helps sustain and expand relationships with key customers/clients. Effective account management is a strategic approach that is distinguished from simple account management and cash flow management. 

The one common mistake that many businesses, both small and large, make and repeat is treating all their accounts with the same business model. You may notice that there is a difference between the types of accounts and the way you manage them. The key here is to identify what resources to invest in and how to handle your accounts efficiently.

Well, automated systems and processes will work. You can safely invest and focus your time on the sales process rather than managing accounts manually. Several excellent accounting software available in the market as SAAS (Software as a Service), can help you accurately manage your business accounts. This type of accounting automation will definitely help you to grow your business.

Top 7 Accounts Management Software in 2022

Manual accounting is a thing of the past now. Instead, software automation in accounting is gradually becoming the industry standard. The right accounting software makes it possible to do accounts management efficiently and systematically. Beyond the core accounting functionalities, automated software also provides several advanced functionalities such as automatic invoice generation to speed up your business revenue collection.  

  1. Quickbooks
  2. Xero
  3. Odoo Accounting
  4. FreshBooks
  5. Sage Business Cloud Accounting
  6. Zoho Books
  7. Wave Accounting

Quickbooks

Quickbooks online is one of the popular accounting software applications. This allows you to manage your business accounts, expenses, send invoices, track inventory, and even run payrolls. This software offers a free trial of 30 days. The following are the core features of Quickbooks online.

  • Access anytime, on any device
  • Easily track your cash flow
  • Build better business insights
  • Create and send unlimited invoices
  • Works on PC, Mac, and Mobile devices

Xero

Xero is one of the award-winning accounting software. This software is designed for small and medium businesses. It is available on the internet, and it offers free access to all its feature for 30 days. The following are the features that the software offers to its users.

  • Pay bills
  • Claim expenses
  • Bank connections
  • Accept payments
  • Track projects
  • Bank reconciliation
  • Contacts and smart lists
  • Capture data
  • Pay runs
  • Files
  • Reporting
  • Inventory
  • Send invoices
  • Multi-currency accounting
  • Purchase order
  • Quotes
  • Sales tax
  • Analytics plus

FreshBooks

Freshbooks is a cloud base accounting software. This software supports different types of business such as freelancers, self-employed professionals, businesses with employees, and businesses with contractors. The accounting features are designed for business owners and accountants.

  • Easy invoicing
  • Organize expenses effortlessly
  • Insightful time tracking
  • Seamlessly collaborate on projects
  • Get paid faster
  • Easy to understand reports
  • Easy to use double-entry accounting 
  • Mobile app 

Sage Business Cloud Accounting

Over three million customers use this software for managing their accounts, people, operations, payments, and banking. Saga business cloud accounting software gives solutions to small and medium businesses. The following are the core features of the software.

  • Create invoices
  • Work from anywhere
  • Bookkeeping
  • Calculate VAT returns
  • Make ACB payments
  • Time tracking
  • Multi-currency
  • Leave management
  • Provide UIF declaration
  • Email payslips
  • Get predefined legislative and payroll reports

Zoho Books

Zoho Books is a unique and powerful suite of software to run entire businesses. It provides 45+ integrated applications. By using Zoho, one can manage, connect and also automate their business. As a result, you can transform the way you work with a long-term vision.

  • Complete CRM platform
  • Home-to-office tool kit
  • Unified finance platform for business
  • Digital transformation and automation
  • Unified HR platform
  • IT management and Marketing plus.

Wave Accounting

This is an accounting and invoicing software. It helps businesses to manage income and expenses. This software enables you to easily create and send professional invoices with advanced features like recurring billing, automatic payments, etc.

  • Free software
  • Recurring billing
  • Invoice templates
  • QuickBooks alternative

Odoo Accounting

This software helps you create and send professional invoices and receive payments online. Odoo is integrated with a suite of business modules and other accounting software. Thus, it is a flexible option for the medium as well as for large companies. The following are the core features of the software.

  • Expenses management
  • Inventory management
  • Point of sale management
  • Sales management
  • Accounting
  • Project management
  • eCommerce

Why use Software for Accounts Management?

Accounts management tools help you keep an accurate record of your business cash flows. Accounting software helps you analyze your financial situation. With software, you can record transactions, generate reports, manage customer accounts, vendor contacts, create purchase orders, track stock levels, generate invoices, and monitor accounts balances.

Rather than inputting manual data and transactions, you can use easily implement software automation. For example, effective accounts management software records the payments you receive in cash or by cheque and creates and sends invoices. It can also notify you about past dues. Thus, there are a number of benefits of using accounts management software.

  • Maintain Control of your finance
  • Track your expenses
  • Reconcile bank statement
  • Reporting and analysis of your transactions
  • Manage inventory
  • Easy collaboration with your accountant
  • Around the clock access

7 Best Practices for Effective Accounts Management

Account management has been around forever in business management. However, times have changed, and the need for effective management has increased in importance. Here are the seven best practices that will help you to manage your business accounts effectively.

  1. New approaches to identify which customers to focus on because all customers are not equal and focusing on the right customers is the key to success.
  2. Create an account plan and implement it effectively.
  3. Customize account management process
  4. Choose your key accounts carefully
  5. Conduct research to identify the needs of your key account customers
  6. Be proactive and create a solid plan for your key account holders to solve their issues
  7. Continuously monitor the performance of your key accounts and develop long-term relationships

Key Takeaway 

Here, you need to look beyond the obvious and seek new win-win opportunities in your customer/clients’ business. For example, by managing your key accounts of the company’s most valuable accounts, your business would be able to increase the revenue. Thus, a key account manager (KAM) typically needs to focus on key account strategy.

Conclusion

Accounts management is an important part of a business that requires rigor and discipline. Effective accounts management helps in maintaining accurate data while implementing much-needed automation to achieve business growth objectives. Therefore, it is imperative that you continually prioritize, customize, and analyze with the most accurate financial data that helps you make the right decisions.

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