The sad truth is that many businesses make bookkeeping and payroll errors that could have been avoided if the business was using accounting software. And having had many years of corporate experience, the size of your business seems to make no difference.  When processes are highly manual, the volume of errors seems to increase. 

For this reason, businesses large and small, need to pay attention to their financial processes. Businesses who are wanting to grow, need to make sure that their business are optimized for success by automating (as much as possible) basic yet pivotal functions like payroll and cash flows.

Whilst we understand that there is a cost to implementing accounting software, I often ask our clients to compare subscription costs to the cost of the errors being made with manual processes. For example, when processing payroll by hand, there are often overpayments due to incorrect hours input, incorrect allowances paid/unpaid and incorrect loadings applied.  Further, we see PAYG obligations not being met as a result – which is presently a red flag for the ATO. 

The point here is that what appears like a cost may in fact be a saving, as the automation of these key processes ensure you reduce your errors and as a result reduce errors in PAYG withholding compliance.

Below are the five main benefits for business in implementing finance software.

Minimizes Mistakes

Manual accounting practices increase the chances of errors in data collection and calculation. You avoid this by adopting accounting software, which automatically performs all calculations, accurately.

This is a massive benefit, especially if your company prepares detailed invoices in which specific items or worked hours are billed at various rates and various times.  All you will be required to do is pick the items for invoicing, enter the quantity and the system will do rest for you.

Accurate Invoicing

Accurate invoicing is fundamental to all businesses.  Ensuring that you are collecting accurate data on the work you perform, the work effort your staff allocated to the job, additional costs you incurred and how much you agreed to charge or will charge for the job is imperative to making a profit. 

You would be shocked to know how many elementary errors are made when filling in manual paperwork or paper dockets.  If work effort or costs are missed, if jobs are charged at the wrong rates, it will invariably result in losses.

Finance software helps by automating the invoicing process with templates, automating the collection of work effort data with time sheets and automating the allocation of costs to jobs with expense tracking.  This helps avoid the inevitable mistakes made by manual invoicing.

Productivity Improvements

Accounting software makes daily routines faster, halving the workload required for collecting data from paper documents and filling in forms. It also saves time for employees in filing in paper time sheets and sick/leave forms.  It also improves data latency, with data being available in real-time.

As a result, managers, team-leaders and employees can do those important yet unbillable tasks quicker – and get back to doing the real work that generate an income.

Cash Flow Management

With accounting software, you can record and track your payables and receivables. This enables you to know your current cash flow status, as well as predicting into the near future.  For example, at the end of the month, when all your bills and customer invoices are entered, you can use the reporting suite to understand if your receivables are enough to pay your future bills. 

Plus, you can keep records of invoices, bills and their payment dates, which will help you to avoid late fees and overdraft charges.

Inventory Tracking

Accounting software packages now have inventory tracking features that can accurately track your inventory and help to save time. You can now track product inventory and provide up-to-date details on the amount of stock you have on hand. They can track inventory as product orders are processed and forecast when you are likely to run out of stock – so that you can order more items in advance.

Mobility

Leading accounting software vendors will provide mobile apps for Android and iOS – allowing you access to your financials anytime and anywhere. These apps can also be used to perform productive tasks such as sending invoices, viewing invoice information as well as expenses, attaching receipts to immediately record expenses, tracking billable time and inputting time sheets and importing new client details directly from the contact information stored in your phone.

Financial Transparency

The true beauty of the new wave of accounting software is the real time insights.  Most tools will have a live dashboard, that provides you with instant visibility of essential business information like how much is in the bank, how much money you owe and how much is owed to you. This financial transparency is pivotal to running a good business.  It ensures business owners can make better decisions in the moment.

With real-time data, businesses can now use the accounting software to calculate everything from asset management to cash flow forecasting.  Further, your Accountant can use the system to review your chart of accounts for coding accuracy and to generate company and trust returns, making the whole process more accurate and efficient

Strategic Planning

Finance software gives you the data to perform financial analysis and strategic planning – to stay ahead of your competitors. You and your Accountant can use this data to plan business and tax strategies, by building forecast models, scenario modelling and analyzing the impact of market trends and investments.

All in all, it may not far away where the days of hiring an Accounts Payable person to code your transactions, is not a necessity.  Accounting software will revolutionize the time you spend performing basic accounting functions – in a good way.  Businesses now require less resource to manage business processes like coding transitions, payroll and super payments, using the software.  Further, with some in-house staff training and online work instructions, your staff will be using the systems to manage day-to-day business finances in no time. (Unless, of course, you prefer to outsource this function to give you back a few hours a week, which you could spend focused on your core business.)

Accounting software provides a robust, fast and secure tool to help manage your business financials and, can easily be scaled to meet the demands of your growing business. And further, with remote online access, you can review your financials in real-time from anywhere in the world.

If you have any questions or need advice and clarity on implementing accounting software in your business, feel free to contact Semmens & Co on 03 8320 0320 for a free consultation.

If you’re looking for more information on how to maximize tax benefits for your business, download our e-book Top 9 Tax Tips That Could Save You Thousands or, learn more about these strategies by registering to attend our webinar.