Improve insight into your business

Debating whether an accounting system is the right choice? Crowe Horwath outlines how it can improve your business processes and help with forecasting.

We’ve seen it all before, right? A company with high sales, decent profits and lots of guys doing the dirty work while the owner oversees the operation; all of a sudden, the employees are gone, the business has fallen over and the owner is left to work off numerous debts to creditors and the IRD for the rest of his days. Where did it all go wrong?

While that question can’t be answered simply, one thing is for certain: the better a business’ accounting system, the less likely it will fail.

There is now a range of systems available to business owners. More than ever, they can be moulded to suit your business, rather than the other way around. From Xero to MYOB and from ‘the cloud’ to the desktop, the options are varied. There are no longer any excuses for not knowing how your business is tracking.

Talkin’ bout a revolution

Want to reconcile your bank transactions in the shortest time possible? No problem! Need to prepare quotes and email them directly to your customers? Easy! GST returns at the push of a button? Of course! How about a system that allows you to prepare and email invoices to your customers on your smartphone without leaving the site? You can do that, too. Put simply, these accounting systems can revolutionise your business.

Modern accounting systems can provide you with an up-to-the-minute, year-to-date profit figure, GST position, cash balance and more. Some can even provide you with an immediate reconciliation between the amount you’ve charged for a job, and the amount you have left in your budget. This is extremely powerful information and can help to plan future tax payments, as well as organising invoice payment and receipt dates – all crucial for businesses at any stage of their lifecycle.

“Put simply, these accounting systems can revolutionise your business

Keeping track

If your business already employs budgeting, most systems can incorporate these and you can track your performance on a monthly, quarterly or bi-annual basis. The benefit of being able to drill down into specific areas of concern – without having to dig through records in your office – is invaluable. Conversely, if you don’t have a budget, the systems can help you set one up.

Online accounting systems can help you answer all sorts of questions:

• Can I afford to pay all my creditors this month?
• Am I being too lenient on my debtors?
• Is buying that new ute on hire purchase a good idea?

The ability to understand your business – the impact of late payers, the opportunity to plan out your expenditure during lean times and the chances available during the busy times – is absolutely priceless. The value of real-time information means you and your accountant can both look into the cloud at any time, from any location and adapt instantaneously.

“The better a business’ accounting system, the less likely it will fail

Time really is money

A common issue among business owners is the time spent at the end of the day reconciling their bank accounts, preparing invoices and chasing up debts. During busy periods, these processes can often run into the small hours of the morning; before you know it, you’re back out on the tools and doing it all over again.

The most precious commodity of any business person is time. The old saying ‘time is money’ has never been more accurate. The more time your spend managing your own financials, the less time you have to quote for new work, find new clients, review processes and profitability on current projects and, of course, spend time with family and friends.

Modern accounting systems can help put an end to, or greatly lessen, the long nights spent in the office. If you’re harnessing the right systems for your business, you no longer have to be a slave to bookwork. If you aren’t already harnessing the power of these accounting systems, you’re only short-changing yourself and your business.

So, do yourself and your business a favour and look into getting an accounting system that works for you – the insight and opportunities are abundant.

More Information

If you have questions about accounting systems, whether you want to enhance your current system or are looking to change/add systems, please contact Peter van der Heijden at peter.vdh@crowehorwath.co.nz; or contact your local Crowe Horwath advisor. For the contact details of your local office, please visit: www.crowehorwath.co.nz/locations or phone 0800 494 569.