You’ve started a business and one of the items on your to-do list is to seek a reputable book keeper and/or accountant. ‘Set-up accounting system’ should also be on your list – it’s an important step to financial success.
It doesn’t mean compiling a shoebox or glovebox of receipts or setting up Excel spreadsheets with complicated formulas. This DIY approach could be detrimental to your business, especially when EOFY rolls around or when you review your business performance to date.
It means: start organising your paperwork via an electronic system. That way you have clear visibility over your finances and are less inclined to run and hide from the challenges – or perhaps opportunities! – that knowing your numbers uncovers. Instead, you can:
- See your cash flow in real-time
- Get a much better sense of your overall financial situation at any given time
- Potentially save dollars in tax, repayments and expenses, and
- Spend less time on admin and more time on your business.
Installing an accounting system will also help support your business needs as your operations develop through hiring more staff, buying and selling more, producing more invoices, working with more suppliers, etc.
Getting your accounts in order doesn’t have to be difficult or stressful if you make the most of accounting software.
Your own virtual assistant
DIY record-keeping ‘systems’ are not an efficient or effective way to file your paperwork as they don’t automatically take into account the numerous taxation and other compliance changes that are introduced each tax year i.e. the introduction of annual reporting of contractor payments in 2013. Up to date accounting software, such as MYOB LiveAccounts or AccountRight, acts like a virtual assistant by taking the hassle out of integrating tax requirements into your own manual system.
Information at your fingertips
Accounting software can help you better understand your business and can also help manage cash flow in real-time. An accounting solution will track your expenses, payroll, inventory, estimate of GST you owe and more, so you can clearly see how your business is going at any time. And if you use a cloud accounting solution such as LiveAccounts, your system is always up-to-date with your business bank balances thanks to your transactions being automatically fed in from your bank. This service is the broadest of any cloud accounting provider, working with over 100 banks and financial institutions in Australia and New Zealand.
Up to date accounting software could potentially save you many dollars in tax, repayments and expenses by ensuring you have the correct financial information. You can quickly identify any errors such as incorrect transaction dates, foreign exchange rates or inventory anomalies so mistakes can be picked up sooner, potentially saving you money in the long term. These aspects can be monitored throughout the year.
Peace of mind your data is backed-up
The Australian Taxation Office (ATO) requires businesses to keep detailed business records for a minimum of five years. With desktop software you can save your accounting data any time you like. The same applies to cloud accounting software, which can automatically do the secure back up for you so that data is still available if something goes wrong with the office computer. Think about what you would do if your office was flooded, ravaged by fire or raided by thieves. Is your important business information safe and accessible no matter what?
Cloud accounting solutions can help you manage your business from anywhere you can access the internet, whether you’re on the road, in the office or at home (on a Mac or PC too). If you choose, you can give your staff, accountant and book keeper (or all!) access to your company files via the cloud. This eliminates time consuming file transfers and travel, and also gives you the opportunity to have your professional advisors collaborate with you on building your business by monitoring in real time key business indicators such as inventory levels and debtors.
Build your business
With your financial data organised electronically, your accounting software can help pinpoint positive and negative trends and generate other reports of your business activity. When were your peak periods? How well did each of your products/services perform? This vital information can help identify new opportunities to improve your business operations, leverage new revenue streams, tap into new markets, and increase cost-efficiency.
Throw away that shoebox, discard other tedious systems and start taking advantage of accounting software to streamline your processes, get better reporting and insights, and ensure you are compliant.
Author: Angela Grecia. MYOB