Category: Firm News

Most small business owners who use accounting software quickly master the basics. They automate processes like invoicing and payroll, track expenses and view real time financial reports to manage cash flow and make better business decisions.

But what many business owners don’t take advantage of are key insights that can improve customer care and increase sales. Here are some smart ways you can use your accounting software to help boost your bottom line.

Gain insights that increase sales

If you’re not tapping into your accounting software analytics to better understand your customers, you’re missing a major opportunity to close more sales.

Most accounting software can highlight your biggest spenders and buying trends. How would knowing who your best customers are, your biggest selling products and how much each customer spends impact your marketing decisions – not to mention help you fine tune your sales strategies?

By the same token, when you know which products and services aren’t selling, you’ll be able to make more profitable purchasing decisions. Most accounting software offers inventory tracking to help you decide what to keep on the shelves, which products to sell off at a discount and which items to phase out altogether.

Improve customer care and boost profits

Accounting software can offer peace of mind when you know your financials are accurate and up to date. But another major advantage of an online accounting solution is how much time you’ll save by automating processes like invoicing and payroll – giving you more time to follow up with clients and seek out new prospects.

We all know how important the personal touch is when it comes to sales. So why not use your accounting software customer data to help remember your customers’ birthdays or thank them when they’ve hit a milestone – spending more than $5,000 on your products, for example?

With enhanced customer data at your fingertips, your business will earn a reputation for personalized service. You’ll be able to respond quickly when a customer calls with a question about a product or an order. And you’ll be able to suggest substitutions and offer valuable add-ons based on their buying preferences, so upselling becomes a snap.

How will you use accounting software to grow your small business?

Savvy business owners take the first step toward better profitability when they stop thinking of accounting software as simply a financial management solution and start thinking of it as a comprehensive tool for business growth.

You may be surprised at the many ways accounting software can help you better serve your customers or improve your sales strategies when you look at its true potential.

Now that you have a handful of ideas for making better use of your accounting software, what will you do differently to enhance customer care, improve your profits and continue to grow your business?

 

Accounting software can be very helpful in a business, as not only efficient but assists in making sure that everything is organised. This then helps create more customers due to excellent customer service. S & H Tax Accountants are aware that sometimes using softwares can be a little difficult, that is why we also provide the bookkeeping services. Our accountants are well qualified and vastly experienced thus, we provide you with the best possible level of service. Book an appointment now with S & H Tax Accountants, email us at info@sahtax.com.au or call us at 03 8759 5532.

“Outsource your weaknesses.” So says start-up guru, Sujan Patel, when advising small business owners to get outside help for tasks like payroll and bookkeeping. And when you consider that 70% of businesses fail due to poor in-house financial management, Patel’s advice seems spot on.

Unfortunately, many small business owners seek to keep costs low by doing everything themselves— unwittingly sabotaging the financial stability of their own company. If numbers aren’t your strength and you would rather focus on building your business, it’s time to hire a bookkeeper. Here are four ways to ensure you find the right fit.

Choose a bookkeeper with experience in your industry

The nuances of bookkeeping vary from one corner of the market to another. When assessing candidates, it’s important to look not only at total years of experience, but also at the relevance of that experience.  For example, if your business is fashion, a bookkeeper who has primarily worked in the auto industry won’t have the insights into your industry that can really add value to your work together. 

Look for membership in a professional association

In addition to a degree or diploma from a recognized institution, your bookkeeping candidate should belong to a professional bookkeepers association. Most associations test applicants to verify their technical skills and theoretical knowledge, with the goal of protecting and furthering industry standards.

Many associations require members to earn a credential, prove a high standard of proficiency, and continue to improve their skills through ongoing professional development.

Put a high premium on communication skills

It’s imperative for small business owners to have open, effective communication with their bookkeeper. You will need to sit together each month to review key financial reports, such as the profit and loss statement, balance sheet, and cash flow statement. An effective bookkeeper should be adept at explaining and breaking down complex accounting concepts in accessible ways, so you always have a clear understanding of your financial position.

During the interview process, ask your candidate to explain a few key concepts, like gross and net profit, job costing, or deferral transactions. Strong communicators can make the abstract easily digestible –exactly what you need in a prospective bookkeeper.

Evaluate honesty and reliability

When you hire someone to look after your books, you place a considerable amount of trust in their personal integrity and trustworthiness. But how does one evaluate these character traits during an interview?

The best approach is to ask open-ended questions that get your candidate talking about ethical challenges they’ve faced in the workplace, such as:

• Tell me about a time when you committed an error. How did you handle the situation and what did you learn from it?
• What would you do if someone else took credit for your work?
• How would you respond to uncovering an unethical or fraudulent accounting practice in the workplace?

The bottom line is that hiring a bookkeeper is about much more than finding an able number-cruncher. The candidate you choose will be an integral part of your business success. Look holistically at your applicants’ technical skills and character to find your ideal match, and you’ll gain a valuable professional ally for years to come.

Although most entrepreneurs recognize the importance of careful financial management, few want to spend their time dealing with numbers. Unfortunately, not keeping a close eye on your income and expenses can be very costly for a business.

Here are five of the most common bookkeeping pitfalls, and some simple tips for getting back on track.

1. Mixing business and personal

All too often, entrepreneurs adopt a “buy now, sort later” approach to expenses, using the same credit card for personal and professional purchases. At the end of the month, they’re left poring over statements, trying to sort things out. Mixing business and personal expenses costs extra hours of bookkeeping each month, and muddies your overall financial picture.

Avoid this pitfall by using a separate credit card and bank account for business, and being disciplined about separating expenditures.

2. Neglecting to track reimbursable expenses

Receipt-tracking is a necessary part of business ownership. You need to keep track of receipts to understand spending patterns and effectively manage your company’s finances. And if you want to claim deductions at tax time, you’ll need to submit receipts along with your tax return.

But far too many business owners take a haphazard approach to collecting and organizing receipts—especially while on-the-go, where a whopping 50% of their expenses are generated. Get the deductions you deserve and simplify tax prep by using an expense-tracking app.  Options like Expensify and BizXpenseTracker can record mileage, billable hours, and other expenditures, as well as generate expense reports. Plus, many of these apps sync seamlessly with your business bank account and accounting software.

3. Not taking advantage of technology

Are you still relying on manual accounting methods? While basic spreadsheet tools can get the job done, they leave the door wide open for human error. Mortgage loan giant, Fannie Mae, once uncovered a $1.1 billion error on their Excel spreadsheet, citing “honest mistake” as the cause.

What’s more, manual methods simply can’t match the technological benefits offered by software like QuickBooks or Xero. These systems track invoicing, link with your credit card and business account, organize expenses, and generate insightful financial reports.

4. Not keeping accounts up to date

Let’s be frank. Most business owners don’t look forward to that weekly appointment with “the books.”  In fact, many entrepreneurs cite bookkeeping as their most dreaded responsibility and will find a host of reasons to avoid it.

5. Doing it all yourself

It is completely understandable for budget-conscious entrepreneurs to try to cut costs by handling bookkeeping on their own. However, taking advantage of professional help—even on a part time basis—can generate substantial savings of time and money over the long term.

Time to get savvy about bookkeeping. The biggest pay off? Saving time with these bookkeeping tips will allow you to invest your talents and energy where they will be most profitable.

If you’re like most small business owners, there are never enough hours in the day to complete every task on your list.
Often you’re faced with prioritizing what you need to do right now – deal with a customer, meet a deadline, attend an event – and the things you know you should do for the ongoing growth of your business.

Scheduling time to attend to these business activities on a regular basis is a great way to get on track for greater success.

Know your numbers

It’s not uncommon for business owners to lose touch with how well their business is performing on a day-to-day basis. But an awareness of your real time income and expenses is the key to making better decisions that will nurture growth.

Implement these changes and see the difference they make in your business:

• Switch to an online accounting solution that offers access to real time data anywhere, anytime
• Monitor your finances on a daily, weekly, monthly, and quarterly basis; review the data with your accountant often
• Check in on your other numbers, too – your website metrics and software analytics – so you know whether your marketing, lead generation, and sales tactics are working.

Update your business plan

Companies should update their business plan at least once a year—sooner if there’s an upcoming change that requires planning, financing, or re-assigning resources (for instance, a product launch, an opportunity to start importing/exporting, or a new side business).
Many business owners neglect to revise their plans on a regular basis. They end up operating on autopilot, losing sight of their bigger goals and the steps they planned to take their business to the next level.
The start of a new year is an excellent time to set goals, mark milestones, and start implementing your plans. The timing also lines up nicely with closing out the previous year’s books, so you can plan with your latest annual figures in mind.

Hire help

It sounds simple, but the self-sufficient, independent nature of many entrepreneurs can make it difficult to get comfortable delegating responsibility. Finding the right people to relieve the burden of doing everything, all the time, is the only way a business can scale and reach its potential.

Think carefully about how you spend your days. Are you still at the point where you want to – or need to – do it all? The ultimate success of any company is to reach the point where it can run without you, so you can enjoy a holiday, pass the business on to a family member, or sell it.
It can take time to find the right people that you can trust to perform their jobs well and continue to grow your business. A recruitment agency can help you craft an attractive job description and recruit so you can focus on strategies that can bring you greater enjoyment and success.
Developing new business habits takes time and commitment – but the pay off is well worth it! Which of these business habits is most important for you to commit to this year?

Now is the perfect time to evaluate your financial position and come up with innovative ways to add revenue streams and generate cash. Here are five ways you might consider to improve your cash inflow:

1. Evaluate your current company assets.

Take a look at your assets, both fixed and human. Could you make slight pivots to create a new form of income?

For instance, if you run a coffee shop or restaurant, could you start a delivery service or offer a drive-thru pickup? Should you charge for delivery?

Think about what you currently have and how you can do more with the assets you already have.

2. Use the power of technology.

There are countless apps you can use to serve your customers better. If you don’t have a website, you should consider getting one built if you want to establish your presence online. You might also have online ordering options or online appointment booking for consultations. If you’re a professional services provider, consultations can be booked with tools like Calendly and go virtual through low-cost video conferencing options like Zoom and Go-To Meeting.

3. Sell merchandise.

You might start selling merchandise that is relevant to your business. You can ask your customers to support you through these difficult times by buying a hat, a shirt, or other products. This can work well if you partner with a charity or get your customers input into the merch you will sell.

4. Send invoices digitally and offer mobile/online payment options.

With social restrictions and lockdowns, it is important to give your customers a way to pay you without having to visit your office or store. You can find a lot of reasonably-priced invoicing systems which allow you to send digital invoices and get paid online. Drop us a message if you need help with this.

5. Offer discounts and promos.

Almost everyone else is having a tough time just like you. So if you can, you might want to consider offering discounts and special promotions to attract customers even during the COVID-19 crisis.

These are just some of the ways you can bring in more cash into your business. If you want to develop a focused approach and need tailored business advice, feel free to contact us so we can discuss your specific situation.

Don’t be left up in the air by traditional IT solutions. Check out the top 9 advantages for small businesses switching to cloud computing.

Cloud computing is fast becoming the norm because storing information and using software hosted on the Internet has many advantages.

1. Save money

Traditionally, a small business spends money licensing software or buying packages to install or download onto individual computers. Cloud computing, on the other hand, can provide ‘Software as a Service’ (SaaS) – including many programs that are available individually.

They’re stored on a service provider’s remote servers instead of on your hard drive so you don’t need a high-end computer to use them.

The automation provided by cloud computing also saves costs. Many companies have slashed their IT overheads because their service providers are directly taking care of updates and program maintenance for them.

2. Save time

Cloud computing was developed to be an on-tap service that requires little knowledge or input from the end user. As such, cloud computing has done away with the end user having to install programs, download updates. You won’t have to stop work for a download bar to fill on your screen or an IT staff member to install a program.

3. Share more

Staff don’t have to rely on email to contend with location issues. For example, a colleague on a fact-finding trip to Shanghai could find a company document online, rather than waiting for co-workers back at the office to find and email it.

4. Flexibility

Data storage is one of the core SaaS offerings of cloud computing – it allows even large corporates to access huge databases of information without having to operate their own floors of servers.

This outsourcing means that instead of having to invest in more hard drives and servers to increase capacity, a growing business can simply store everything on the cloud. All you need is an Internet connection and devices to access it.

5. Improve reliability

Cloud computing is proving that software as a service, rather than as a product, is more reliable. With so many people using a single program, instead of everyone using individual copies, service providers are directly managing software and being updated about issues immediately.

Fewer problems are arising because software isn’t being downloaded onto individually customised computers containing other programs and systems that the software might not be compatible with.

6. Be mobile

It’s almost as if cloud computing was designed specifically for mobile devices because you don’t rely on the device itself for storage capacity. You don’t have to email documents from home to work computers anymore.

7. Improve security

Security is the biggest issue people have with cloud computing because users have to hand over responsibility for data security to their service providers.

Cloud computing always makes sense when it comes to guarding against physical theft, such as a break-in at a business’s premises. However, the hacking or system failure of servers containing masses of user data remains a concern.

8. Quickly recover from disaster

Backing up important documents on a separate hard drive is important, whether you’re using cloud computing or not. But in the case of a natural disaster that denies you access to your premises, cloud computing can be advantageous.

Because you can access your documents anywhere there’s an Internet connection, cloud computing can be a vital tool to ensure business continuity.

9. Bankability

The cost and time savings implied by using cloud computing can be promoted as an advantage in business plans. It’s not just an alternative choice to traditional IT set-ups but an evolution of IT thinking. It can be applied to make a business leaner and more effective at service delivery.

Studies have evaluated the lifecycle cost savings of cloud computing at up to 50% for companies using high numbers of in-house servers. Add to that, the elimination of service interruptions caused by traditional IT issues, such as downloading updates and fixing system errors, and your company can move forward a lot faster than your competition.

Too many businesses fall over because the owner has not established efficient business systems. This typically happens because the business owner is so caught up in the day-to day running of the business that the fundamentals of good business management get forgotten. Often too it must be said that the owner simply doesn’t like bookkeeping or other administrative tasks, so these get put on the back burner.

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Maintaining positive cash flow can be challenging for small businesses, whether you’re just starting out or have been running your company for years.

The difficulty often comes down to waiting for clients to pay their invoices. One or two chronic late payers cost valuable time and money when you have to chase them down; if reliable clients also fall behind one month, the result can be devastating.

These tips will help you get paid faster, so you can avoid a dangerous cash flow crunch.

Stagger your schedule

By billing some of your clients mid-month and the rest at month end, you can facilitate a steady stream of ongoing cashflow.

Invoice quickly – and accurately

When a contract wraps up or it’s your scheduled billing day, send your invoices straight away. Automating your invoicing with a cloud-based accounting solution will eliminate the need for time-intensive manual billing and ensure you never fall behind. Before you send an invoice, be sure it’s addressed to the right contact. It also helps to itemize costs in detail so no questions arise that delay payment processing.

Set a deadline

Make it clear on every invoice when payment is due – for instance, “Payment due on receipt” or “Payment due within 30 days”. Ideally you’ll have outlined your payment terms in writing, including any penalties for late or non-payment, when you start working with a client. Summarize your terms on each invoice as a reminder.

Set payment policies

You might choose to reward customers who pay early with a small discount or reward as an incentive—or charge a penalty for late payments. Consider a 5% reduction on invoices paid within a week, or a 2% penalty for every week overdue. Outline on your invoice the different amounts your customer will owe, depending on the date they choose to pay.

Follow up

If a client doesn’t acknowledge receipt of your invoice, check in to make sure it was received. Inquire about the status of your cheque as soon as a deadline is missed, then resend the invoice with a friendly reminder.

Be willing to negotiate
Sometimes a client intends to pay but needs a bit of time to come up with the cash. Be open to negotiating a payment plan; it’s better to receive payments in small increments than not at all.

Final tips

Although no small business owner wants to resort to legal action, if you’ve tried repeatedly to contact a customer you may have no other option except to claim the loss as a business deduction.

One of the best ways to encourage customers to pay on time is to maintain a friendly relationship. Encourage goodwill by adding a handwritten note to your invoices, remember your customers’ birthdays, and be sure to thank them from time to time for their ongoing business.

It’s a simple fact: when your customers feel a connection to the person behind the business that serves them, they’ll be more inclined to take care of their invoices quickly.

The start of the year is the perfect time to dust off last year’s business plan and set some new goals for the future.

While some entrepreneurs love planning, others feel overwhelmed by the process. How do you decide on just a handful of goals that take priority, with so many moving parts that make up a business?

These tips can help you get started brainstorming how your company can plan for greater success in the years ahead.

Redefine your brand

Is the elevator pitch you used a year ago – even six months ago – still accurate? Unless you are crystal clear on who you are as a company, whom you’re here to serve, and what you hope to achieve in the next one to three years, it’s going to be hard to come up with meaningful goals.

Take a look at your company vision, mission statement, and core values. If they need tweaking to reflect where your business is today and where you want it to go, start there. Then you can move on to setting some useful long and short term goals.

Big picture planning

Entrepreneurs dream big—and they should! Thinking big can lead to ground breaking products and services that become the foundation of innovative, successful companies.

When it comes to goal-setting, thinking big is great, too. But in order to make those big ideas like “increasing market share” or “growing profits” happen, you need to break them down into smaller, specific goals and strategies tied to a budget and timeline.

For instance, while your overarching objective may be to “grow profits by 50% by December 31”, your smaller goals might include:

• Launching a social media campaign the first week of March to attract 2,500 new prospects by months’ end; or
• Increasing total sales by 40% with the opening of an online store by July 1^st.

The key is to define goals that are measurable and achievable.

Define smaller goals

Thinking through how you’ll achieve your larger objectives can be a fun exercise – one you can turn into a group activity, including your entire team. Sit down and discuss what you know about your customers. Review your historical sales data and look over your up-to-date budget and forecasting.

With all the relevant information at hand and everyone at the table, you can come up with strategies that align with your company vision, assign deadlines, and get buy-in on what everyone needs to do to see your ideas through to completion.

Final tips

It’s worthwhile to take some time to reflect on your personal goals as you think through your business goals. Maybe you’ve been wanting to get involved in mentoring, improve your networking skills, or attend more conferences. Self-development is, in a sense, professional development – and vice versa, so include them in your plans.

Of course, coming up with business goals is just one part of the equation. You’ll also need to monitor your progress, noting milestones and sharing your company achievements with your team on a regular basis. Tracking your results will help your employees stay motivated – and it also gives you the chance to adjust your goals and strategies in time to achieve the best possible results by year’s end.