Taking account of your business

Liquidation, receivership and bankruptcy are all risks when you run your own business, but a comprehensive accounting system can help you prevent it happening to yours

It’s all too common in the construction industry to see a once-profitable businesses go bust, in some cases overnight. The obvious question to then ask is, where did it all go wrong?

It’s not an easy question to answer, although one thing is certain – if the company had a comprehensive accounting system in place, they would likely still be trading.

Given the vast range of accounting systems currently available to business owners – from Xero to MYOB, through to cloud-based and customised solutions – choosing one to use can be challenging. There is something for everyone’s budget, and there is really no longer any excuse for not having an effective accounting system in place.

Get smart!

Smart accounting systems can revolutionise a business. They can reconcile bank transactions, prepare quotes, provide GST returns with a keystroke, prepare and email invoices to customers – all without you having to leave the construction site.

Businesses that have established budgets in place can benefit by incorporating accounting systems into this process, allowing them to track performance and identify areas of concern. For those businesses that don’t have a budget in place, an accounting system can help them set one up.

Modern accounting systems can also provide up-to-the minute reports on profit figures, GST, cash balances, and a whole lot more. Some can even provide an immediate reconciliation of the amount that has been charged for a job and what remains in the budget.

This type of information is invaluable, as it can assist with business planning and payments.

Having access to real-time information offers a greater insight into how a range of business decisions and late payers can impact on an organisation. It also provides an enhanced ability for both the business owner and their accountant to simultaneously view data anywhere, anytime.

Time management

A common complaint amongst builders is the amount of time it takes to reconcile bank accounts, prepare invoices and chase up debts. Time spent on this leaves less time available for hands-on business management and can even reduce leisure time.

An effective accounting system can put an end to long nights scanning accounts and paperwork. It opens up a world of insights and opportunities, and the freedom to choose how you spend your precious time.

In the next edition of Under Construction, we’ll take a closer look at and compare some of the more popular systems currently available.

If you would like to find out more about how accounting systems can enhance the way you do business, contact Peter van der Heijden at peter.vdh@crowehorwath.co.nz or your local Crowe Horwath advisor.

For details of your local Crowe Horwath office, got to:

www.crowehorwath.co.nz/locations or telephone 0800 494 569.