In the last 10 years I have seen massive changes in the technology that supports the bookkeeping function of business large and small. These advances in technology have the ability to transform the bookkeeping process to drive efficiency and reduce costs.
The following is a common bookkeeping process that many small business owners will be familiar with:
Business owner receives an invoice from a supplier in the mail and types that invoice into their bookkeeping software.
Business owner then places the supplier invoice into a binder for storage.
Business owner raises sales invoice, then prints and mails to the customer.
Business owner waits for bank statement to arrive in the mail and then types the transactions appearing on the statement into their bookkeeping software.
Business owner then reconciles the bank account.
Business owner prepares a back-up of their bookkeeping software on CD/USB and mails to the accountant.
Business owner continues to use their bookkeeping software.
The accountant makes changes to complete the tax.
Business owner then needs to re-enter changes made by the accountant in their "live" copy of the bookkeeping software.
You will notice that this process involves a lot of time consuming data entry, duplication of effort and delays.
There was nothing wrong with this sort of bookkeeping process 5 years ago - it was an efficient way of doing things with the technology that was available at that time. However, times have changed.
With cloud accounting technology like Xero, automating a business’s bookkeeping process to eliminate time consuming data entry and duplication of effort is easy. And with add-on's like Receipt Bank that automation can be taken to a whole new level whilst moving the business towards a paperless office.
A recent study performed by Xero shows that 77.6% of businesses still manually store at least some of their receipts and invoices in shoe boxes, with more than half of those surveyed (57%) admitting their filing system is not very organised.
Commenting on the research Trent Innes, Managing Director of Xero Australia, said, “The data shows us there are still many Australian small business owners who aren’t using technology to find day to day efficiencies within their business and cut down on time consuming manual processes.” “Aside from making it incredibly difficult to keep track of business expenses and cash flow, paper-based receipt/invoice systems become very costly and time consuming.”
When small businesses get on-board with the latest bookkeeping technology, they see substantial benefits in their businesses. Not only do they significantly reduce the time and cost of completing their bookkeeping, they also have more accurate and up to date financials. This means that small business owners are able to better manage their business and spend less time doing it.
It also allows the business to achieve substantial cost savings associated with handling all of that paper - printing, stationery, shredding, storage and lets not forget the labour costs.
The study performed by Xero revealed that small businesses are forking out on paper administration, with 12.7% spending more than $1,000 a week on paper administration costs and 3% spending more than $5,000 per week!
For more information in relation to the study performed by Xero, please click here. And for more information on how you can implement technology in your business to save time and money, please do not hesitate to contact us.
And for those who want to outsource the finance function of their business to get on with what they do best, don't hesitate to ask about our bookkeeping and CFO packages.
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1300 328 855
Suite 13, 33-35 Macedon Street, SUNBURY VIC 3429
03 9744 4522