If so, WHY?!
Most of us hate administrative work associated with our businesses. We just want to get the job done and then relax while the paperwork magically does itself.
But what about client invoicing, supplier invoices, paying said invoices, bank reconciliations or checking whether you’ll have enough cash to pay your next BAS?
If your business is fortunate enough to have a reliable administration manager, bookkeeper or accounts person, fantastic! For the rest of us, updating our accounts is probably the least favourite aspect of running our business. We can deal with unhappy customers, staff not showing up, pretty much anything to avoid doing the books until they need to be done.
But we all know the accounts need to be accurately updated so we can make sure our business is travelling well, to ensure customers are paying and suppliers are being paid, to check the amount owed to the ATO and see how much we can pay ourselves this week.
And ASIC statistics confirm what we know – two of the top three causes of insolvency reported by Liquidators are cash-flow problems and poorly kept books and records. By letting your accounts fall behind increases the chances of your company becoming insolvent and facing liquidation.
There’s a better way to keep the books
When you’re running a small to medium business you need to decide how your time can be best used each day. And to be honest, it’s probably not best spent on the least favourite part of your business. If you don’t love doing your accounts, think your time could be better spent in other parts of your business or are only updating your accounts at BAS time – you need a bookkeeper.
Bookkeepers come in a few different flavours:
- A hands-on combination of administrative support and bookkeeping.
- More technical Virtual Chief Financial Officer (CFO) roles.
- Virtual bookkeeping firms such as SmartBooks Online.
Which one best suits you will depend on your preferred level of personal interaction, reliance on technology and need for financial guidance. Often these providers will set you up on the Xero accounting platform combined with various programs or apps, often including Receipt Bank. The beauty of this setup is that it slashes manual data entry time. Transactions are updated through bank transaction feeds directly into Xero, and to enter paper invoices and statements, simply take a photo with your phone and Receipt bank reads it and works out where to assign it.
If you like the sound of that, you can then add point of sale (POS) systems, enterprise resource planning (ERP) systems, apps for better managing shift workers and payroll such as Tanda, and forecasting apps such as Fathom or Spotlight Reporting to help you focus on building a better future for your business. With this setup, a lot of the pain is taken out of running your business.
Solutions to save you time, money and stress
Often people feel like they’re saving money by doing their own books, but it can actually be the opposite because:
- You’re spending time doing admin rather than dealing with customers or making sure your business runs smoothly.
- Your accountant has more work to do updating your accounts before they can process your BAS.
- Your spending personal time doing the bookwork, stressing about when you’re going to do it and putting pressure on your family.
Check out Smartbooks Online or speak to your accountant for a bookkeeper recommendation. If your books are in a mess and you’re worried your business may not be able to pay its debts, it may be best getting in touch with us first to help decide the best way forward for your business. You can call us on 1800 560 557.
For more information on director advice, check out our director advice page here.