5 Ways To Reduce Manual Journal Entries For Your Manufacturing Clients

Manual work. 

Two words that can both inspire and strike fear in equal measure.

A lot of manual jobs are still a necessity in the modern world, but more and more have been replaced by technology that takes away the physical and mental strain in our daily lives. However, a lot of companies still ‘do things the way they’ve always done them’, and this means time wasted on work that could be automated.

As a bookkeeper, you can build trust with your clients and gain their confidence through consistently excellent work and good advice on improvements in their existing processes. And that’s precisely what this blog is here to offer – advice on how to make daily work a little smarter for manufacturers. So, if you have manufacturing clients, here are five ways they can reduce their manual journal entries and make accounting simpler.

1 – Use a standardized platform

In the early days of a business, processes can be a little looser, things can be noted down on paper, post-its, in digital notes, or even on spreadsheets when companies reach that stage. However, as things grow and scale, everything needs to shift to a standardized format, and this doesn’t always happen.

Using a single platform for sales orders (SOs), purchase orders (POs), and really all accounting paperwork can immediately cut down time spent on needless admin and allow manufacturers to focus on growth opportunities in their business (or anything else they think needs their time).

This can get even better if they’re using a platform which automatically generates SOs and POs whenever certain conditions are met, instead of entering details each time one is required.

2 – One home for all inventory

As we mentioned above, spreadsheets can be common in the early days of manufacturing, and certainly still have their time and place. However, as soon as data is spread across different sheets, or even different tabs in the same sheet, things can be overlooked.

Having clarity when it comes to inventory is crucial to the smooth running of daily operations. Manufacturers need to know the levels of their raw materials, products in process, and completed products, to understand whether they can meet orders on time.

And as with SOs and POs, adding automation to your inventory tracking can quickly remove manual work. This includes automated inventory calculations based on incoming orders, as well as speedy stock counts using barcodes, cutting down thinking time and pen and paper budgets.

3 – Get your COGS in order

A business’ costs of goods sold, or COGS, is the direct costs of producing the products you sell, including costs of the materials and labor.

It shouldn’t be a surprise, but ensuring these are correctly calculated is a cornerstone of good budget management. You need to fully understand how much every individual product is costing you to make, to stop yourself from potentially falling into the red.

You need to track the price of your materials over time, as these won’t always be consistent and could change on a monthly or even weekly basis, and your COGS need to reflect this at all times. Added to this, you need help from your shop floor team in tracking how much time is spent on putting together an individual product on average.

For larger, or more intricate products, this could be half a day, a full day, or longer, whereas smaller products might be a matter of minutes. Understanding this and putting a proper monetary value to each individual item allows you to manage your costs accordingly and prioritize products which sell well while earning well.

The added upside is that with proper tracking in place, you reduce continual manual calculations, and as is the theme of this blog – there's less manual work!

4 – An automated and synchronized inventory system

Looking at point two, this may feel repetitive, but once you have a single home for your inventory, you need to make sure the relationships between your production, sales, and shipping software are all perfectly harmonious.

While it’s important to track inventory using a single source of truth, this won’t help if your sales and shipping software are siloed and don’t communicate with the numbers in your warehouse. This can leave you vulnerable to sudden stock-outs, or unaware of what’s been shipped and what’s waiting to be sent out.

The perfect process should see a manufacturer tracking individual raw materials, to when they’ve been used to make a product, to when that product is ordered, and to when that product is packed and shipped. And all of these steps should be automatically reflected in their inventory database.

This will vary a little depending on if the manufacturer is using a make-to-order or make-to-stock workflow, but the ultimate outcome is the same.

5 – Get a software that does it all

Finally, we come to the software that brings everything together. Katana Cloud Manufacturing is built to make daily life easier for manufacturers, bringing automation into their daily routines and cutting down on unnecessary manual journal entry tasks.

With native integrations to the best accounting software on the market, including QuickBooks Online and Xero, as well as integration to e-commerce and shipping providers, manufacturing data is always in sync and never puts the business at risk.

And as you’re likely reading this as someone who would be recommending Katana rather than using it, we want to offer readers of the Successful Bookkeeper blog an exclusive invite to our partner program. If you sign up today, every client you invite to Katana (between now and April 30th) will receive a 30% discount for their first 3 months.

And if you’d like to learn more about Katana then you can pay us a visit at katanamrp.com.


Shawn Coultice

Article by Shawn Coultice

Shawn is the Head of Channel Partnerships at Katana. He is passionate about introducing manufacturing companies to the right technology to help them succeed. He utilizes industry partnerships to better service and scale the Katana customer base across the globe.