The Transformation That Technology Has Brought To Bookkeeping

Technology is an essential component of the bookkeeping industry, and it has been evident in recent years. Aside from a plethora of bolt-on, upgrades and advancements, technology made it easy for business owners to take care of various financial tasks. Accessing data in real time, generating reports and monitoring expenses are just some of the perks of using advanced business technology.

Platforms such as Xero are operated via cloud-based technology. This is why taking care of many aspects of business operations becomes a breeze. Even clients can view, edit or even add notes to the statements if needed. Invoices are paid in a timely manner because bookkeepers are given options to download transactions. It ensures that you have the most accurate invoices and statements.

Manual Payroll Management: A Thing of the Past

It is not fun managing payroll when you have many obligations to fulfil. However, you can switch from traditional payroll to full-service payroll. Automation is key. When payroll system is automated, dealing with payroll complexities become a thing of the past. These systems are easy to use so everyone involved in the bookkeeping tasks can add personal notes and manage payroll efficiently.

Payroll management software makes the task more of a dream than a nightmare. This is because the challenges associated with tracking employees and sub-contractors are reduced or even completely eliminated as the software can be downloaded from your smartphone, tablets and  other types of mobile devices. With this capability, business owners who are on the go will no longer have difficulties keeping track of every transaction regardless of their location.

Cloud-based software and technologies allow business owners to gain access to accurate business information. Reports can be verified and edited so that it provides the most accurate information. Since this is the most convenient way to keep financial records, bookkeepers and accountants can discuss the reports with the business owners. The relationship becomes fluid and interactive as everyone is involved.

Even if the bookkeeper you hired is hundreds of miles away from your physical office, it does not mean you cannot get the job done. Collaboration becomes possible for people across the globe and discussing reports with your bookkeeper over the phone will never be a problem. Accessibility makes it convenient to connect, monitor, update and make plans. If you are using cloud-based technology to run your business, you are going to stay ahead of the game because you are increasing productivity, reducing manual tasks and maximising your business’ earning potential.

 

The Steps To Proper Cash Flow Management

There are many challenges associated with managing a small business. Aside from following best practices to keep your business on its feet, you also need to make sure that your cash flow is properly monitored. Cash flow management is more than just ensuring that you have enough money for future business endeavors. For your business to survive, you have to manage accounts, collect and reconcile payments and send invoices. For seasoned business owners, these tasks are considered a breeze. However, if you are managing a fledgling company, each task is deemed daunting and challenging.

Even if you have a bookkeeper to take care of your finances, you still need to monitor business activities. Although bookkeepers make each task easier by ensuring you are stress-free around BAS time, being keen on the information on your financial report is essential.

Since many small businesses consider using bookkeeping software a better way to deal with numbers, why not use this practice to your advantage? As these programs provide features that enable you to capture information on receipts, track invoices and even generate reports in an instant, managing your cash flow will not be a difficult task.

Here is how you can work side by side with your bookkeeper in managing your cash flow:

Plan Accordingly

You need to have enough cash for a rainy day. Just because your business is generating a decent profit does not necessarily mean you should be complacent. It is important to anticipate needs by planning accordingly. Ask your bookkeeper if you have saved enough money for monthly expenses, taxes and other financial obligation.

Stay on top of bookkeeping game

Do not let bookkeeping stress you despite the fact that it is an insurmountable task. No matter how busy you are, you have to dedicate at least 30 minutes for the bookkeeping task. This way, you will know if there are some areas that badly need your attention. It prevents problems associated with BAS. Never allow these small problems to grow into a huge task.

Provide incentives to customers who pay on time

Chasing customers is not an easy task. If you have customers who pay in a timely manner, giving discounts or incentives will motivate them to pay on time. Incentives are more cost-effective as compared with spending months following up on customers who do not pay.

Pay more attention to cash flow than profit

There are businesses that are focused on profits, but the fact that profits naturally flow, you will never notice whether or not you still have enough cash for investments and expenses. It is important to pay attention to cash flow because without it, you will not be able to make future plans for your business.

Advanced Business Techhnology vs Traditional Business Environment

Getting things done is such a challenge when you have a traditional business environment while almost everyone is moving towards the cloud. For one, you need to dedicate grueling hours to finish a task. Putting off the task will have a negative implication as it will result in wasting time. Workflow management is essential to accomplishing your business goals. How are you going to accomplish these goals if each task is delay-causing and time-consuming?

This is where cloud technology becomes more of a need than a want. Here are 4 reasons it is time to consider switching to cloud technology:

1. Improved workflow

Have you been stuck in an endless routine of paperwork? Do you have to cancel a meeting just because you have not finished generating a financial report? A constant pile of paperwork can be very stressful. You need to make sure that everything gets done accurately and in real-time. Manual processes can take hours to complete. Do you have all the time in the world to take care of all tasks in a day? Bookkeeping tasks involve storing receipts, keeping records, monitoring income and expenses and preparing reports. It takes a very dedicated bookkeeper to do all these. Cloud technology works side by side with the bookkeeper to save time and money. When you can capture images of your receipt, putting these files in your organisation’s bookkeeping system will be a breeze.

2. Easy access to your financial information

You need a regular update of your financial health. How would you be able to know about your business performance if you do not have access to the summary of your financial statements? Cloud technology lets you access financial information anytime, anywhere and on any device. All you need is an Internet connection to get instant access to essential bookkeeping files.

3. Know how much money you have

You will never know whether you can grow your business without determining how much money you have and where your money is going. Having knowledge of your true cash flow will help you make the right decisions. All of these will be possible once you embrace cloud technology.

4. Prevent fraud

You need total control of important financial information to find out if there is any fraudulent activity within your organisation. A simple oversight of fraudulent transactions can create a ripple effect on your business. Vigilance coupled with using cloud software will reduce the risk of fraud. It will also be easy for you to provide preventive measures when you see any irregularities before they affect the entire business performance.

Do You Know How Your Business Is Doing?

Hiring a bookkeeper keeps every business owner sane as they are provided with regular financial reports that determine the financial state of their business. Managing payroll, monitoring expenses, tracking income and paying taxes are just some of the tasks a bookkeeper should carry out. While bookkeepers know best, you still need to take part in ensuring that your business is in good hands. It all starts with asking the right questions.

Is my business generating profit?

Many business owners are completely clueless about their business performance. More often than not, they rely on bookkeepers to provide numbers, but without basic bookkeeping knowledge, understanding the records will be a challenge. Business owners who are eager to know where their business currently stands should know whether or not their business is profitable. Your bookkeeper can make comparisons between financial performances in the previous years. Once you know how to compare business performance, you will have an idea if you still have sufficient cash.

Am I overspending?

Since monitoring your expenses ensure your cashflow is intact, you also have to ask your bookkeeper how much you are spending on a regular basis. When paying wages, make sure computations are correct. You should also take note that the benchmarks for wages costs will vary from business to business.

How can I grow my business?

It is never easy to move forward if you have no idea how to grow your customer base. However, making an investment to seasoned business owners is already a breeze because they have the ability to integrate customer relationship management and job management software packages. As a result, business owners can gain a better insight into their current customer base. When you have an idea who your customer base is, you can formulate marketing initiatives and planning so you will be able to grow your business.

What can I do to improve my financial literacy?

Business owners need to sit down with their bookkeeper to obtain information tailored to the needs of their business. Each and every business has needs and these needs will not be addressed unless a business owner has an honest conversation with the bookkeeper. Even if you are the business owner, there are still some aspects of your business that you need help with. You should know who your top customers are. Your bookkeeper can provide recommendations and even help you understand how your business works.

 

4 Reasons Business Owners Can Benefit From Hiring A Bookkeeper

Business owners do everything to save money and generate profit. If you ever know about a business owner who skimps on bookkeeping, it should not come as a surprise because this is part of their cost-cutting measures.
DIY bookkeeping is a common practice among small business owners. Since running a small business means less obligations, they can dedicate most of their time to monitor their income and expenses. However, things can get unpredictable especially when you plan to grow your business. At a glance, your financial performance may be doing well, but scratching beneath the surface will reveal the small cracks.

A bookkeeper should be treated as an investment rather than an extra expense. In the long run, you will realise that your cash flow is intact because your bookkeeper sees to it that you have enough money for future investments and monthly expenses. There are many reasons a bookkeeper is essential regardless of the size of your business.

Errors are minimised

A simple oversight can result in committing costly mistakes. When generating financial reports, your business can be at stake if you miss out on ensuring that the numbers are accurate. Bookkeeping reduces these errors by checking every detail on the report. Bookkeeper’s full attention ensures that major errors are not registered.

Bills are paid

Proper bill handling is important to prevent penalties and extra fees. Late payments affect your cash flow because you need to pay for the penalties, which is an additional expense. A bookkeeper can take care of this essential task so you minimise the risk of penalties.

A clearer view of your finances

Although you already know the financial standing of your business, it does not give you an assurance you have a much deeper understanding of your business performance. A bookkeeper can explain what is going on by giving you a detailed account of your finances.

Faster and smoother invoicing

Chasing after clients can be time consuming. A business owner does not have all the time in the world to take care of this essential aspect. Hiring a bookkeeper provides better invoicing by checking who has already made a payment. Reminders will also be sent to customers and clients who have not yet made a payment while you take care of business obligations essential to growing your business. A bookkeeper who prepares the books for you will give you stress-free and smoother transactions.

4 Fundamentals Of Financial Management Small Business Should Master

Financial literacy is essential to achieving long term success in spite of running a small business. Aside from keeping your financial records for tax purposes, there is a good reason proper financial management should be observed. Ever wonder why business fail? If you do not want to be part of the statistics, familiarising yourself with the fundamental of financial management will help you to put your business in proper perspective.

Start with a business plan

Your business plan serves as your road map to achieving success. Without a business plan, you will never know the direction your business is taking. A business plan helps you to set goals and face challenges. It keeps your eyes on the prize. Whether you want to get access to profit and loss forecasts, know your financial targets and budgets, a business plan will be critical to the process.

Do you follow a strong bookkeeping practice?

Good record keeping is essential no matter how established your business is. Since money is the lifeblood of your business, being completely aware how much you are getting and spending will give you a clearer understanding of your financial health.

Although many business owners find tracking expenses a boring task, one cannot argue that knowing the amount of cash you have will help you take total control of your finances. A business may be profitable, but without keeping your finances in check, being financially broke will not come as a surprise. Submitting detailed and accurate records is important especially when it comes to tax. Even with the use of bookkeeping software, being keen on checking the details is a must.

How do you manage your cash flow?

You cannot achieve peace of mind unless you understand your cash flow. Savvy business owners understand that cash flow is essential to any future business plans. Whether you want to grow your business, explore additional business opportunities or simply keep your cash flow intact to regularly pay monthly expenses, a steady flow of cash is important.

Do you have professionals to help you with your bookkeeping tasks?

Having a better picture of your business performance will help you understand where your business stands. Bookkeepers and accountants are crucial to the success of your company. They offer tailored advice based on your financial position. Having someone who identifies your business needs will lead you in the right direction. While outsourcing financial management to bookkeeping professionals may be costly, the numerous benefits still outweigh the cost.

The Importance Of Keeping Receipts

A receipt is just a small piece of paper where your purchases or transactions are reflected. Most of the time, these receipts find themselves inside the trash can because business owners prefer to take a mental note of the
transactions instead of diligently filing these receipts. While one purchase is easy to remember, you can get sidetracked by other obligations. That single purchase can easily slip your mind when you have many things to take care of.

As they say, you will never know what you got until it is gone. The same is true with keeping receipts. They may not seem to be valuable, but they are part and parcel of record-keeping. They play a part in monitoring your expenses. If you take the time to capture receipts paid with cash, it will be easy for you to know how much you are spending on a daily basis.

Capturing your business expenses is a daunting task unless you make it a habit to reconcile your bank account. One mistake that business owners make is mixing personal expenses with business expenses. This is a bad practice because it makes the monitoring process more difficult than you know. As your expenses increase, the process of assessing your spending habits becomes a challenge.

Keep in mind that the purchase includes GST and ignoring it can spell trouble for you. Miscalculating your expenses can also hurt your taxes in more ways than one. While the damage is reparable, you will need to pay for penalties and late fees. The payment for these fees are often taken from your cash flow. When your cash is spent unnecessarily, opportunities become limited.

Two ways to capture business expenses:

1. If you have paid your transactions by cash, be sure to collect receipts or even capture information. Using a smart phone app, you can take a photo of your receipts. This way, you will have an instant copy of every transaction you make. This is a smart habit for those who tend to forget keeping a record of receipts during lunch meetings and business travels. There are many apps you can download, which will enable you to snap a photo of receipts and send them in just a few taps.

2. Use your business account for paying business expenses. If you have made a purchase of your office supplies, never attempt to use your personal account for paying them. Pay for your purchases by transferring private funds into your business account. It is easy to monitor your expenses when you have your own business account.

Cash Flow Survival Tips For Small Business

A business cannot survive without a steady flow of cash. In spite of the profits it makes, the lack of cash flow can result in losing your business. Why is cash flow management important? How can business owners ensure that there is enough money for future investments and monthly expenses? Proper cash flow management is the secret to having a steady cash flow. Sure some businesses have secret sauce to ensure survival, but there are simple rules that are crucial to the survival of every company. If you manage your cash flow intelligently, you will be able to reduce error, plan for the future and manage your company’s spending habits. A few survival tips will not hurt:

Track, track, track

Handling your finances requires tracking everything so you will know what is coming in and what is going out. Simple oversights will result in losing track of your expenses. Tracking everything means you should monitor how much you are spending on company lunches and travels in real time. When you have a real-time view into cash flow, you will be able to have the ability to manage your cash flow efficiently.

Gain deeper understanding of your financial data

It is not enough that you generate a financial report because you should also understand whether or not your business is running smoothly. It is easy to misunderstand data unless you scratch beneath the surface. Got some questions? Ask your bookkeeper rather than assume that everything is doing perfectly fine. When information is outdated, the chances of making costly mistakes also increase. Make it a habit to consolidate your financial data to get accurate information. If you obtain financial information from multiple sources such as handwritten files, excel spreadsheets and some online tools, you can get confused in the long run.

Automate bookkeeping processes

Another reason your cash flow management is in chaos is due to manual bookkeeping processes. There are aspects of bookkeeping that you need to automate such as generating invoices. As your business begins to grow, it will be difficult for you to track clients who have and have not made payments. Automation bypasses the tedious process.

Evaluate spend

Are you doing good at spending? Do you always see to it that you renegotiate contracts and get a real-time view of your cash flow? If you want to drive growth, you need to know how to spot business trends. It is also necessary to formulate strategies that will improve your overall business performance. Costly mistakes can affect your business. However, if you are well-prepared, there is no other way to go but up.

What Can Virtual Bookkeepers Do For Your Small Business?

Technology has made it easy for many businesses to take care of the most essential task:bookkeeping. Many business owners dread preparing invoice and tracking expenses. However, when the time comes that you need to grow your business, you need a financial report to find out if your business is ready for expansion. Bookkeepers ensure the financial success of your business. Without a doubt, they make job much easier by avoiding bookkeeping in a shoebox. Aside from taking care of the financial aspect of your business, bookkeepers are also intended to provide sound advice when it comes to financial management.

One thing that concerns most business owners is the ability of workers to finish the task. Since bookkeeping demands time and accuracy, payroll management , invoice preparation and other critical bookkeeping tasks seem to be a challenge. This is why it is necessary to choose the bookkeeping software that will not only reduce time consuming processes but also streamline workflow.

With plenty of advance business technology options to choose from, it is difficult to determine the software that suits your business needs. There are some elements of bookkeeping that you must keep in mind so you can narrow down your selection.

Common features of bookkeeping software:

With the proliferation of virtual bookkeepers, more and more businesses have tapped into more advanced bookkeeping technology to stay relevant. Expense management requires regular monitoring so you will know if you still have enough cash flow to pay your bills or even to grow your business. Before you make a choice, you need to take the following features into account:

  • Data Integration: When essential data can be accessed by bookkeepers and business owners, delays are reduced and important work is done in a timely manner. With a seamless integration with the software of choice, you will be able to ensure that expense management is not overlooked. This feature must be part of your bookkeeping software package as it is essential to keep data available whenever, wherever.
  • Document Capture Capabilities:There are a number of ways you can obtain invoices, receipts and other important documents. They can be obtained from email, traditional mail and much more. Since keeping track of everything can be difficult, savvy business owners use their smartphone to capture essential information. The expense management software you should choose should have this mobile feature so it will be easier for you to snap a photo of bookkeeping documents.
  • Cloud technology: The need to remotely access key information is made possible by cloud technology. Aside from giving business owners peace of mind, software with cloud capabilities will also boost productivity. Documents and data are also available to review.

3 Factors To Consider When Choosing Cloud Service Provider

Big and small organisations consider choosing the right cloud provider to be a daunting task as there are different types of cloud services to choose from. If you are not accustomed to cloud technology, coming across various terms related to cloud computing can make the selection process more confusing. Before you dive into embracing cloud technology, it is important to understand their benefits, features and the type of cloud service you need for your business.

Different types of cloud service

These days you can choose from three cloud service models, all of which have their own advantages and similarities. these services are Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS).

SaaS uses an environment that enables multiple users to stay connected through the web. PaaS has the ability to create and test applications with the use of a hosted environment from a cloud service provider. IaaS involves the use of hardware services from a cloud provider.

Uptime

Aside from familiarising yourself with the different types of cloud service models, the percentage uptime or the cloud service level must also be taken into consideration. If a cloud service provider’s Service Level Agreement (SLA) is at 99.9%, this means they have a total of 44 minutes downtime on a monthly basis.

Cloud Deployment

The options you have for cloud deployment are also worth-exploring. Just like the cloud service models, the cloud deployment options will also depend on your needs. All of the options have their own merits. These options are public cloud, private cloud, virtual private cloud and hybrid cloud model.

Public cloud uses a web interface, but storage and application are made accessible to the general public.

Private cloud has cloud-computing capabilities that enable organisations to use their own firewall. This option is designed for business use.

Hybrid cloud offers the best of both worlds as you get to enjoy the affordability of public cloud and obtain greater peace of mind with the flexibility and high level of security of private cloud. The model uses cloud and on-premise platforms.

Virtual private cloud offers a multitenant cloud-hosting environment which allow businesses to separate resources. More often than not, virtual private cloud offers higher level of data security.

Choosing the right cloud service for your business can be tricky because of the numerous options to explore. Make sure you choose the cloud model and service that is aligned to your business needs. This way, you will be able to maximise the effectiveness of cloud technology when it comes to providing mobility, flexibility and security to your business.