Cloud based Accounting Apps can save you time and money. This is especially true when using low level employees for manual work and using one dimensional tool such as word and excel to run processes such as inventory and invoicing. These Apps remove the need for version control, creates work flows for employees and customers and provides a dashboard so you can see the business state of affairs instantly. These applications which were only reserved for big businesses are now being written by smart developers all over the world to allow small businesses to access this space.
Good payment systems can double the speed at which bills are paid. Two types in particular are as follows:
Keeping records of transactions is one of the great pains of small business ownership. Holding onto physical receipts and invoices only adds to the trouble. It’s such a chore that most clients procrastinate and you end up harassing them for data at the end of each financial year.
Smart accounting technology allow clients to record paper receipts simply by photographing them on their phone. The software reads the picture, transcribes the purchase data, and sends it into their accounting software using machine learning and OCR (optical character recognition). It’ll do the same for electronic invoices – clients just need to forward the emailed invoice to the app.
Businesses with poor time-keeping can run into compliance issues, and many haemorrhage money. Some overpay hourly workers, others over-service clients. Yet most small businesses think a formal timekeeping system will be an expensive hassle.
Online timesheets allow staff to clock on from their phones, using the phone’s GPS to confirm they’re actually at work. There’s no infrastructure to buy or install. And the time records can be coded to various tasks, allowing you to figure out how much time is going into specific jobs.
Inventory is a massive cost, yet very few small businesses manage it well. They don’t have the processes or dedicated employees to stay on top of it, so they end up relying on periodic stocktakes. That limits what you can do from an accounting perspective. For example, it’s hard to track products and figure out the true cost of goods sold (COGS).
Software can do a lot of the grunt work for you. The right accounting technology will add new items to inventory as stock comes into the business, and subtract them as they’re sold. The real-time view of inventory will help clients get their ordering just right, and will allow you to drill down into COGS.
More and more small businesses want an online shop, and it doesn’t make sense for them to stop at having just one. Besides a store on their own website, smart businesses also sell goods through Facebook, Google, Amazon or eBay. Those big platforms can really expand their reach.
Getting started with ecommerce is daunting, and keeping tabs on multiple shops can be downright scary. But there are now some great off-the-shelf apps for all of this. And they’ll integrate with your accounting software, so you can keep sight of the whole business.
Customer relationship management (CRM) software can bring discipline and efficiency to the sales process.
It’s easy to set up the system to reflect the steps in their sales cycle, then identify where each prospect sits in the funnel. As time goes on, you will figure out what sales or marketing activities are required at each stage, and you may even be able to automate some of them.
A CRM will also helps you work out when prospects might become sales, which will help with cash flow management. And the systems can be synced with accounting software, so sales staff can issue invoices from the CRM as soon as they get a yes.
Hiring employees should be one of the great highs of small business ownership, but it becomes stressful for most people.
It takes a lot of coordination to pay people the right amount, on the right day, while complying with tax and reporting obligations. You can strip away a lot of that admin pain by setting up a system that automatically calculates tax, creates detailed reports, pays direct into staff bank accounts, makes it easy to reimburse expenses, and keeps track of employee leave (and leave requests).
There’s a lot of accounting technology that can improve profitability. The types mentioned here are among the most popular, but there are more. Xero integrates with over 700+ third-party applications. That’s the power of online accounting.
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This article is an extract from the Xero website and is written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of its contents.