Automation is a relatively inexpensive investment that provides an upper-hand by eliminating typical small business pains. These include cash flow management, boosting productivity and making your business more attractive to funders.
Why Accounting Automation should be an SMEs First Priority
According to
Bench, there are 19 things your small business should automate for business success. A staggering six of the top ten are all related to accounting!
If yours is like many other small to medium-sized enterprises, you probably pour tremendous effort into your core business. You are looking at ways to run LEAN, increase efficiency, lower operational costs, and grow.
There’s nothing wrong with that, but SMEs tend to “leave the accounting to last”, which is a major oversight. Without knowing it, neglecting to prioritise accounting automation can counteract your other efforts.
All businesses need to make money. Even if you started your business with the noblest social impact motivations, we can all agree that business success comes down to profitability. Getting there relies on good financial management. That means being actively involved, and familiar, with the figures
Fixing Business Finance
Financial reporting will help you to identify errors, financial mismanagement, and fraud!
For the benefit of those who might not know, there are two parts to accounting:
- Financial accounting is commonly referred to as bookkeeping. It is the recording and aggregation of financial information to create financial statements and reports.
- Managerial accounting analyses and interprets those reports to communicate financial information to managers and guide informed business decisions.
Not only should your books be up-to-date, but they must be accurate, or they can lead you to misguided decisions.
Large corporates enjoy great business success because they have suitable systems in place. Cloud-based accounting software made for small businesses, like
Xero, is affordable and levels the playing field with larger competitors.
Moore provides financial and managerial accounting services with a focus on SMEs.
Helping small businesses reach their full growth potential is a particular area of interest. It is for this reason that we assist founders with migrating to Xero and providing adequate training.
Today, the smallest, leanest companies can afford an enterprise-grade solution.
How Automation and Cloud Accounting Drives Business Success
Centralise and Collaborate
There are no more Excel spreadsheets scattered across your server (or an employee’s desktop), and erroneous overwrites. All your records are live, updated and in one place. Business operations and financial parties (bookkeepers, accountants, directors, auditors, banks etc.) are better connected.
Secure All Your Records
Technology has come a long way. Nowadays, cloud accounting systems are arguably the safest option because your information is backed up, and recovery is fast.
Capture All Business Expenses and Know When Payments are Due
You can capture receipts on your smartphone because R50 here and there adds up quickly. Before you know it, you have hundreds of Rands unaccounted for and unclaimed VAT.
You can also upload invoices or ask suppliers to send them directly to your cloud system, which will send payment reminders to your preferred device.
Cash Flow Management
Visibility is everything. With all your records centralised and synced, you get a clear picture of what you have, what you owe, and what you expect. This helps avoid negative cash flow and spot problem areas (like bad payers) for rectification.
Xero has many valuable features. One of my favourite features is that it tracks and analyses historical trends (like seasonality), providing accurate cash flow forecasts whenever needed.
Instant Reports
Get the insights you need at the click of a button. You can automate sending of statements and reports too. This is particularly helpful with can’t miss funding or tender opportunities that require presenting your financial reports.
Accurate Budgeting and Forecasting
Now that you have a realistic view of your business performance, you can better plan for business success.
Xero analytics projects your bank balance based on what you’ve invoiced and what you owe! It even indicates which invoices are urgent.
Increased Credibility
An accounting system helps you keep an eye on your business health—fixing minor problems before they become big ones. This history will show in your reports, making your business far more attractive to investors and lenders (improving your chances of business success).
Minimise Compliance and Tax Burdens
The right system lets you implement measures and controls to maintain compliance. VAT, PAYE, UIF, and other taxes are automatically calculated too.
Lower Payroll Costs
You can better utilise your human resources by automating repetitive, menial tasks. You can capture attendance by linking to biometric access control systems and calculate commissions by integrating with your CRM or ERP.
Get Paid Faster
Software like Xero lets you set up digital payment options. It allows customers to pay online when they receive your invoice (even on their smartphone). We’ve seen remarkable uptake and significantly improved age analyses.
Focus on Revenue Generating Functions
Automating your accounting doesn’t only free up your time to focus on core functions. It makes it easier to use professional services from trained CAs, for less than it costs to hire a full-time CFO. You will receive expert guidance to set suitable KPIs, streamline processes, increase productivity, and save money.
Overall, atomisation with cloud accounting helps you to run your business better and achieve your desired business success.
For more information about converting to automated cloud accounting solutions like Xero, please contact your
local Moore firm here.