Did you know? The noun “workflow” occurs twice per million words in modern written English. It’s not common enough to be an everyday word, but also not so technical that it’s obscure.
If you’re in accounting, chances are, you hear it often. And you’re maybe even among those who contribute to the statistics above. Optimized accounting workflows, after all, allow us to get more things done. Consistently, at that.
But what exactly is a workflow in accounting, and how can it benefit your practice? This guide will explore the ins and outs of accounting workflows, providing you with the knowledge and tools to streamline your processes and boost productivity.
What is a Workflow for Accounting?
Let’s first define what we mean by “workflow.” The Oxford Advanced Learner’s Dictionaries describes it as “the series of stages that a particular piece or type of work passes through from the beginning until it is finished.” In essence, it’s work flowing from one stage to the next.
Workflows in accounting map out the steps to be completed within a specific accounting process. These could be anything from processing invoices and managing payroll to preparing financial statements and conducting audits. You likely already have a workflow in place for many of these examples.
But what makes an accounting workflow different from an accounting process? If you’re wondering the same, you’re not alone—these two are often used interchangeably.
Your workflow helps track the steps you follow to complete a task or project. Meanwhile, your process encompasses these steps and the strategy behind them.
Process
Workflow
What are the Components of an Accounting Workflow?
- Input: The resources required to kickstart the workflow. These could be a brief (in the case of content creation) or raw materials.
- Tasks: The individual actions that need to be performed within the accounting workflow.
- Roles: Clearly defined responsibilities for each task, specifying who’s accountable for what.
- Sequence: The order in which tasks should be performed, including any dependencies in between.
- Timelines: Deadlines for completing each task and the overall workflow.
- Decision Points: Moments in the workflow where choices must be made, potentially altering the next steps.
- Documentation: Clear instructions, guidelines, and templates to maintain consistency and quality throughout the process.
- Review and Approval: Checkpoints where appropriate parties verify and sign off on a task.
- Output: The determined result. These could be tangible products or agreed services.
- Integration Points: Where the workflow connects with other processes or systems within your accounting firm.
- KPI and Metrics: Measures to track the efficiency and effectiveness of the workflow.
The Importance of Workflows in Accounting
Workflows have presumably enabled businesses since the 1920s, the earliest known instance of the term. No matter the size of your firm, you, too, can benefit from implementing accounting workflows. These benefits include:
1. Time Savings
2. Error Reduction
3. Compliance
4. Improved Time Management
Clear timelines and deadlines keep everyone on track, helping your team prioritize tasks and work more efficiently
5. Simplified Training
6. Enhanced Transparency
7. Increased Client Satisfaction
8. Scalability
Examples of Workflows in Accounting
Sales
If sales is the lifeblood of a business, or so says author and speaker Brian Tracy, workflows are the vessels. They keep everything moving smoothly.
A sales workflow involves repeatable steps to engage, nurture, and close potential customers. When optimized, workflows empower your sales team to be proactive, maximizing available resources at every stage of the customer lifecycle. In turn, you can rest easy that no opportunities slip through the cracks.
Here’s what it usually involves:
- Initial contact
- Lead qualification
- Proposal creation
- Negotiation
- Contract signing
Invoicing and Billing
Tracy also named cash flow as another business lifeblood. And an efficient invoicing and billing workflow is key to keeping healthy cash flow. You want to ensure you receive the money Sales brings in.
This accounting workflow typically includes:
- Invoice creation and sending
- Payment tracking
- Payment reconciliation
- Financial records updating
Recommended Reading: The Best Time Tracking and Billing Software for Accountants
Marketing
Managing marketing efforts requires its own carefully choreographed workflow. Because it intersects with sales, a well-defined marketing workflow helps you attract and engage prospective bookkeeping clients consistently.
A marketing workflow might involve:
- Campaign planning
- Content creation
- Expense tracking
- ROI calculation
Recommended Reading: 8 Accounting Lead Generation Ideas for CPA Firms
New Client Onboarding
First impressions matter, and client onboarding is your chance to make a great one. When you implement a client onboarding workflow with precision and care, you set the stage for a positive, lasting client relationship.
Here’s what this workflow in accounting usually involves:
- Consultations
- Information and document collection
- Account setup
- Training
Client Management
Maintaining strong client relationships is as important as acquiring new ones. In fact, research by Bain & Company fellow Fred Reichheld suggests that increased retention translates to increased profits and cost savings. Happy existing clients drive success!
A defined client management workflow helps you stay on top of client needs and expectations, ensuring you’re consistently delivering value.
Here’s what it often includes:
- Regular check-ins
- Prompt issue resolution
- Progress tracking
- Feedback gathering
Task Management
Many accounting tasks recur monthly, quarterly, and annually. Even if assigned ahead of time, progress can stall without proper oversight. This is where a structured workflow becomes a necessity.
A task management workflow in accounting ensures that everyone knows what needs to be done, by whom, and when. It keeps your accounting operations running like a well-oiled machine.
This workflow usually includes:
- Task creation and assignment
- Deadline setting
- Progress tracking
- Task completion and review
Recruitment
What drives the development and growth of an accounting practice? Elite accounting talent. A structured recruitment workflow helps you find, attract, and hire accounting professionals who match every role and workplace culture.
This workflow often involves:
- Job description writing
- Job opening announcement
- Application screening
- Interviews
- Job offers
Employee Onboarding
An employee onboarding workflow typically includes:
- Paperwork completion
- Induction
- Equipment and access setup
- Training
Remember to tailor each of these accounting workflows to your firm’s specific needs. And since most of these processes recur frequently across client accounts, the benefits of iterating them will serve your firm well over time.
Tools to Optimize Workflows in Accounting
Throughout this blog, we’ve emphasized the role of optimized workflows in maintaining efficiency and compliance. But how exactly do you optimize accounting workflows?
Cloud-Based Accounting Software
The foundation of any modern accounting workflow is robust, cloud-based software. Solutions like Karbon or Jetpack Workflow offer:
- Real-time collaboration and task management
- Centralized client information and document storage
- Automated workflow templates for recurring tasks
- Integration with other accounting tools and software
When choosing an accounting workflow software, those that align with your specific business goals provide the most value for your investment.
Automation
An Airbase survey found that manual tasks persist across accounting and finance teams—only 3% reported they take up less than 5% of their time.
Workflow automation allows your firm to buy back time for higher-value tasks. That way, you don’t just boost productivity, you also reduce the risk of accounting burnout.
Here are two automation tools to consider:
Document Management System
How many documents does a single accounting process use? That number should be enough reason to implement a Document Management Systems (DMS).
Some popular DMS for accounting include:
A good practice is to set up automated filing rules to sort documents as they come in. Doing so makes it easier to retrieve documents when needed.
Data Analytics
Gone are the days when accountants were only seen once or twice a year. Today’s accountants are advisors. They’re expected to use data analytics to provide informed insights and forecasts.
Tools like Power BI or Tableau can visualize your workflow, helping identify bottlenecks and inefficiencies, ultimately leading to accounting process improvements. For example, you can create a dashboard that tracks the time taken for each step in your month-end close process.
By integrating data analytics into your accounting workflows, you deliver the kind of forward-looking, strategic advice that accounting clients demand.
Common Workflow Bottlenecks (with Solutions)
In an ideal world, accounting workflows would be efficient and free of delays. In reality, however, accounting teams encounter challenges that slow down progress.
Below are the common bottlenecks causing workflows to neither work nor flow.
The Bottleneck
Manual data entry – Inputting data into spreadsheets or legacy systems consumes valuable time and increases the risk of human error.
Approval Delays – Many accounting tasks require multiple approvals before they can proceed. When approvers are unavailable, progress is stalled, and schedules disrupted.
Inconsistent Data and Reporting – When different team members are working with siloed legacy systems or non-standardized data formats, reporting inconsistencies can arise. This leads to errors in financial statements and longer reconciliation times.
The Solution
Automation – Integrated accounting workflow software can streamline processes by automatically capturing, processing, and updating data in real-time.
Automation – Notifications and reminders can be set up within accounting workflow management systems to alert approvers of pending actions.
Unified Accounting System – Centralizing data ensures that everyone in your team has access to consistent, up-to-date information. Standardized templates and report formats can also help create uniformity across departments, reducing the likelihood of discrepancies.
Collaborative Tools – Investing in tools that integrate with accounting workflow software facilitates smoother communication and information sharing. Features like shared dashboards, instant messaging, and task assignment make collaboration more efficient.
Implement Optimized Accounting Workflows with TOA Global
As we’ve learned in this guide, accounting workflows are far more than just industry jargon. They’re a default necessity for running a scalable and profitable accounting practice.
But remember: Implementing an accounting workflow management isn’t a one-and-done process. The key to optimizing your accounting practice lies in continuous iteration.
As your firm grows and adapts to evolving client needs, so should your workflows. Regular assessment and refinement ensure that you’re always operating at peak efficiency.
At TOA Global, our offshore accountants and bookkeepers are trained to make the most of accounting workflow tools and processes. Ready to start your journey towards greater efficiency and success? Schedule a call with us today!
