The Australian accounting software market is estimated to be worth over $500 million a year, so it’s little wonder that the country’s top software providers are jostling for share of market and share of voice.
With the major players such as Xero, MYOB, Intuit and Sage competing for your business’s dollars, how can you separate the benefits for your business from the marketing hype? Is it worth upgrading your accounting software? Or are these well-advertised new packages just the same products with unnecessary bells and whistles?
The emergences of cloud accounting systems over the past decade has given both business owners and advisors greater access to data, through connectivity, real-time reporting and specialist reporting software. When set up correctly, accounting and business management systems will support business growth and strategic decisions – In fact, they have a large part in business transformation and can make your business more agile.
However, based on our experience, accounting systems are often overlooked and underinvested as businesses owners consider these as non-productive costs that won’t drive profit. Many of the SME businesses that we have interviewed as part of the William Buck Hour use ‘rule of thumb’ indicators to tell if the business is doing well and often only the business owner has the ability to manage the business this way.
Furthermore, many accounting systems are providing limited information to support the decision makers, as it is not the right system for the business or industry – that is, too big or too small, an old version that has been superseded or your business processes have not been adapted to get the most out of your system.
Here’s five signs that your accounting system may be holding you back
1. Financial Accounts taking too long to finalise
Is your finance team or bookkeeper finalising month end reports more than a week after month end? Are copies of your desktop accounting software being sent to your accountant?
The right accounting system should streamline the reconciliation and month end process so that it is finalised as efficiently as possible. Furthermore, multiple users should be able to use the system at the same time, including your advisor. By having reports finalised in a timely manner, business owners will have the tools to make timely business decisions.
Did you know that Cloud accounting systems are enabling business owners and management to manage cashflow due to real-time reporting?
At anytime and anywhere in the world (internet connection is required), management can now see the company’s bank balance and any outstanding debtors or creditors giving them a real-time overview of the financial health of the business. Given that SMEs with 20 or more people must already be on Single Touch Payroll, smaller businesses can get a competitive edge by implementing this type of technology.
2. Lost Data
Is your accounts team or bookkeeper spending more time dealing with lost data than on analysis and business improvement projects?
Accounting systems in the cloud all include some level of automated off-site data back-ups, either directly in the software or via third-party service providers. Knowing that your inventory records, financial reporting and payroll data is proactively managed and protected from security risks can provide invaluable peace of mind.
3. Increase in Finance team wages
Is your wage budget for admin support, debtor’s clerks and accounting staff growing faster than sales? The development in cloud accounting technology has seen an increase in automation (i.e. bank feeds, dual reconciliations) and artificial intelligence. With the right accounting system, your administration team should be working more efficiently and allowing the business to focus on revenue producing expenditure?
4. Limited Reporting Capabilities
Is Owner and Senior management time being spent producing and editing basic business reports like debtors, sales and inventory?
If you are still relying on editing information in excel to produce meaningful reports, you are wasting time that could be better spent driving profitability of the business. Both accounting and specialist software (i.e. inventory system or practice management systems) provide detailed reporting that can be customised without needing to export data to excel.
The days of downloading data to excel to manipulate into meaningful management reports are over. Cloud accounting systems can be integrated with speciality reporting software that provide business owners and management with financial and non-financial data, as well as a rolling cash flow forecast at the click of a button. The management reports combined with interpretation and guidance from your advisor will assist business owners drive profitability.
5. No Customer Information
Are your sales staff manually cross referencing your customer details with the information on how much they bought from you and when they paid?
Cloud based inventory and point of sales systems allow sales staff to access customer information while on the road, instore or at head office. This provides your sales team with valuable information to ensure your customers preferences and needs are met. The systems will also allow staff to search and locate stock items so they can drive sales at all times.
A key feature of recent developments in accounting software has been the increasing connectivity of business software. For businesses that embrace this trend, increased communication between these systems allows the business managers to capture and report on the financial and non-financial drivers of the business. Prior to implementing a new system, thorough thought needs to be given to the design of the systems to ensure data is both generated and captured for later use.
Like it or not, the world is becoming more and more about data. A standard P&L, Balance Sheet and cashbook just don’t do enough to capture the information needed to monitor and improve the modern SME business.
If you are considering upgrading your accounting software, it’s important to get the right advice. William Buck has experts in each of Australia and New Zealand’s top cloud accounting providers and can help you to evaluate the systems available.