Keeping on top of all your records and receipts
A few days ago I was paying the bill at a restaurant and noticed – to my horror – the owner working through several hundred receipts, entering each one manually into a spreadsheet. Put quite simply, I was witnessing a business owner descend into the depths of record keeping hell.He was doing this, he told me, to forward to his tax accountant. (Quite how he lodged his BAS I didn’t discover.)
The restaurateur thought this would save him money in preparing his tax return. I told him that it might save him a little but that the tax accountant would view the Excel file with mistrust: did it add up, was it reconciled, were there errors in any of the formulae?
I told him there was a better way of working and left him my card. I will have to see whether he contacts me. What I will tell him is what I’d tell any small business owner.
Firstly you need to get online accounting software: yes, it will cost you money, but it will save far more than it costs. If your business is small and relatively simple MYOB Essentials is probably the right choice; if your business is more complex then you might need MYOB AccountRight. Both MYOB Essentials and AccountRight are cloud-based solutions, available on a subscription basis (no upfront cost to you, just a monthly fee). You can get a good side-by-side comparison of the features of these products here. If you are still not sure which is the best product for you, seek advice from your accountant or bookkeeper.
With your online accounting software, you’ll see the advantage of some great automated tools, eliminating the need to manually key hundreds of receipts and invoices once a year.
Let’s take a look at two of these tools and the benefits they deliver.
SmartBills, is the smarter way to manage bills. It allows business owners to upload invoices direct to their own accounting system, not only eliminating manual data entry but also replacing the need to store hard copies with digital storage.
When you receive your invoice from your supplier simply upload or email the document to your MYOB file. The software is smart enough to extract all of the key data (such as supplier name, date, invoice number, the amount of the expense and so on). You will be able to click into the transaction to review, edit if you need to, and then save the transaction to your accounts. In the not too distant future you will also be able to snap an image of the invoice with your phone and upload that image.
SmartBills not only eliminates manual data entry, saving you heaps of time, it also gives you a really simple mechanism to ensure your accounts are always up to date. I’ll come back to the importance of this a little later.
The other great automation tool available from both MYOB Essentials and AccountRight is a direct feed of all of your bank transactions into your MYOB file. Every payment you receive from customers and every payment you make to suppliers will feed into your MYOB file overnight.
If you have been using MYOB to create all of your customer invoices, most customer payments will auto-allocate against those invoices. If you are using SmartBills, most supplier payments will also auto-allocate against the invoices / receipts you have loaded.
Bank feeds not only save you time on data entry, they ensure your accounts are always up to date and make it easier for you to ensure your accounts are accurate.
Real time information – for you, not just for the ATO
Which brings me to the last benefit of running one of MYOB’s great cloud solutions. Because your data is always up to date you can rely on it to understand how your business is performing. You can measure not just sales but gross and net profit, you can see not just your cash balance today but a forecast of your cash balance next week or next month. Real time information provided by SmartBills and Bank Feeds puts you in control of your finances. And that is what I will be telling the restaurateur if (when) he calls me!