EOFY is a great time to start using accounting software (properly)
End of financial year is a great time to start using accounting software, either for the first time or perhaps upskilling to ensure your current software is kicking goals for you.
Maybe you need to upgrade your excel worksheet or shoebox of receipts to something a bit more robust. Perhaps you are still highlighting items from your bank statements and getting sick of spending hours on historical transactions.
Getting organised form 1 July will save you in both time and stress. But not only that, you will be able to gain valuable insight into your business financial performance. This is probably what scares people the most – facing their spending habits and potential lack of profit for the first time. However, you can’t change and grow, if you don’t know your starting point.
Most accounting software providers charge a monthly fee – and in most cases (but not all) free software has its limitations. But you don’t have to spend thousands each month to have reliable numbers at your fingertips. You can get accounting software that does GST reporting, invoicing, financial reports, budgeting and payroll starting from around $20 a month.
There is not a one size fits all solution for accounting software, and you need to find the right one for you and your business. One that you understand, one that you will use, one that you find easy and lastly, one that actually has the features that you need.
So here is a list of our top 6 reasons why accounting software is a fabulous investment:
- Stop losing money. Sometimes people are blissfully unaware that certain products or services are losing them money. But they continue to sell and market those products and services as they don’t have any reliable data to prove otherwise. So they are sending money down the toilet by advertising products that they are already losing money on. Crazy. Accounting software can help you determine your best performing income streams and also highlight any areas of concern, before they sink your ship.
- Managing cashflow is always hard for small business owners. Cash comes in the door and most times it feels like it goes straight back out again. But then you get a GST bill or a super bill and you think to yourself…..WHAT, I can’t afford it. But you see with accounting software, you can track all those amounts owing to the ATO in an instant. In fact, you can know how much you should have set aside at any given point in time. Not just at the end of the quarter. Planning for cash flow is vital for long term survival.
- Payroll headaches be gone. When you hire employees there are requirements that you must abide by and providing employees with payslips is one of the basic mandatory requirements. Simply paying money into their bank account is not meeting all your legal requirements. So if you have staff, accounting software should be solving all your payroll needs. Payslips, single touch payroll reporting, accruing for any leave entitlements and superannuation obligations. That right there is worth the cost of the accounting software alone, as getting taken to FairWork by a disgruntled employee will cost you way more.
- Plan for business expansion. That’s right, if you choose accounting software that has a budgeting model, you can plan all your crazy ideas for the future direction of the business and see what impact that will have on your profit and cash flow. Want to lease an office, put in some numbers and see what the impact is. Want to hire more staff to generate more sales, enter those variables into the budget and see what impact it has on the bottom line. Those massive financial investments should be done with a careful strategy, winging it simply is not great advice.
- Paperless office is everyone’s dream right? And your accounting software can make it a reality. The shoe boxes of faded receipts is no longer in your life. Can I get an AMEN for that? Instead, each time you get a receipt or invoice or bill, you can snap a photo of it direct to you accounting software from you phone. That way you can store a digital copy of the receipt in your accounting software. No more fading receipts, no more emptying your wallet at the end of the month trying to find paperwork, no more “the dog ate my receipts” excuse. We find paper is what overwhelms so many people as it is a daily reminder of what they haven’t dealt with. And accounting software can fix all that in a jiffy.
- Where is your long term vision? If you ever have the intention to either sell your business or get an investor on board, a Profit and Loss and a Balance Sheet written in excel or on a napkin simply will see you laughed at. Investors will want to see possibly 2 years of financials, possibly signed off from an accountant, to show the viability of the business, profit potential, debts to external parties, assets owned by the business to determine their valuation and return on any investment. You need to plan for that in advance, which we know is not always easy, but the sooner you start, the sooner your financial reporting is ready to go.
The biggest complaint we get from business owners is that accounting software is expensive – but let’s break it down. At say the average price of $50 a month, that is under $2 a day to manage the entire financial side of your business. From linking bank accounts (aka no more highlighting bank statements), to uploading receipts (hello no more shoebox), to managing the entire payroll function, budgeting and financial reporting – we think $2 a day is pretty small price to pay.
But you need to flip your mindset – stop resenting paying for accounting software you don’t use accurately or properly. Instead, invest the time to learn how to use your accounting software to save you time and understand your business better. Then, it is no longer an expense, but a bloody valuable piece of software.
If you need an independent assessment of which accounting software, would be right for you – please reach out. We run virtual financial coaching sessions to discuss your business, your needs, and what would be the right fit. We work with multiple software providers to ensure you get the best outcome. Choosing the wrong software will make the entire experience painful and fruitless and cost you far more in the long run to switch to another platform at a later stage.