Your Official Guide to Preaccounting
Preaccounting is the mundane, tedious work that nobody wants to do, but everybody needs to do before the truly valuable accounting work can begin. But what is it exactly? Here’s a more formal definition:
Preaccounting [pri–uh-koun-ting] (noun)
The system through which financial data is gathered, coded, aggregated, and normalized so as to enable accounting to occur; accounting processes executed by non-accountants, including expense management, time tracking, etc.
Why should preaccounting matter to you?
If you’re currently stuck sorting through piles of client receipts, confirming billable hours and mileage, or carrying out similar manual tasks that could be automated – you’re losing precious hours that you won’t get back. Your progress toward taking more of a “trusted advisor” role slows because of many bottlenecks that feel out of your control.
How can you make your preaccounting process more efficient?
An efficient preaccounting process ensures happy clients and smooth sailing throughout the year, from month-end close to tax season. We’ve compiled some high-level tips, tricks, and pointers in the table below to guide you on your journey toward a more efficient preaccounting process.
Best ways to resolve them
Manual processes are still the norm
Manual data entry, crumpled receipts, and lost paperwork are the norm and not the exception at your firm or with your clients.
Identify bottlenecks in your current workflow and then picture what an ideal, automated preaccounting process would look like. Survey your team to see where they’re spending a majority of their time on manual tasks, then seek out a solution that will help them focus on more important work.
Lack of urgency
Without consistent check-ins and deadlines to follow – driven by the accountant – many clients fall into the dreadful habit of submitting receipts and other expenses at the last minute, every month.
Create a timeline of expectations with your client that emphasizes a more real-time workflow, where both sides collect and report data as it’s received. Look for software that prioritizes automation and allows clients to submit receipts and expenses on-the-go. If a solution offers built-in client reminders, all the better!
Lack of accountability
Since preaccounting is not technically anyone’s responsibility, it’s assumed that both the accountant and client will do their part. In the end, however, it’s the accountant’s job to make sure things get done on time.
Outline a clear set of responsibilities for both parties – accountant and client – so that there’s no confusion about who plays what role in the preaccounting process. It also helps to show clients the bigger picture of how bottlenecks in areas like accountability affect success downstream.
Lack of incentive
This is especially prevalent in old-school expense reporting workflows, where the client already knows reimbursement could be weeks – maybe even months – away. The process of tracking down receipts and organizing paperwork isn’t alluring by nature, so accountants are left in an awkward limbo.
Convey to the clients why finishing their preaccounting tasks early or on time will be beneficial to their job and happiness. Incentivize quick submissions with timely review and reimbursement. Alternatively, consider a corporate card so clients won’t need to pay out of pocket or wait for reimbursement at all.
P.S. Speaking of preaccounting efficiencies – did you hear that Expensify just released the Expensify Card? With the Expensify Card, Expensify becomes a one-stop shop for all of your expense management needs from swipe to settlement. Learn more and sign up today at card.expensify.com.
David joined Expensify in 2013 to help scale internal processes and expand the product to support larger, more global companies. After a few years of building out Expensify’s sales and onboarding programs stateside, David moved to Melbourne in 2016 to launch Expensify's Australian presence. He led hiring efforts, set up a regional sales strategy, and established relationships with regional accounting firms. Today, David is back in the US heading up the ExpensifyApproved! Partner Program and developing ExpensifyApproved! University into a time-saving resource for accountants worldwide.
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