1. Why cloud accounting is good for business
If you want your business to work smarter and faster, cloud accounting software is a wise investment. Working in the cloud will give you a better overview of your finances, and speed up your business.
What is this thing called the cloud?
Think about when you use internet banking. Every time you access your bank data, you’re using the cloud. The cloud makes data and software accessible online anytime, anywhere, from any device. The hard drive on your computer or laptop is no longer the central hub.
What is cloud accounting?
In the case of cloud accounting, you keep your business books online. That includes records of income and expenses, and assets and liabilities. The information is encrypted, much like a bank’s, so only people with the login can view the data. Businesses started using cloud accounting software – also known as online accounting software – in the early 2000s. Most systems come with tools for quoting, invoicing, managing bills and more. Learn more about what cloud accounting software can do.
How cloud accounting works
Users subscribe to an online accounting software solution and move their books to the cloud. From then on, they can access their accounts from any web browser, or from an app on their phone. Most users connect the software to their business bank account, so that banking transactions flow automatically from the bank to the books. This saves them from a lot of data entry.
Benefits of cloud accounting software
Running your business accounts online has many advantages.
- Data about your sales or income and purchases can flow straight from your bank to your books so you don’t spend hours transcribing them.
- You can see your current financial position at any time.
- Multi-user access makes it easy to collaborate online with your team and advisors.
- It’s online software so there’s nothing to install or update, and all your data is backed up automatically.
- You can set up a dashboard showing important financial information like who owes you money, what bills are due, and how your cash flow is looking.
Accounting software shouldn’t be a chore to use
Small business accounting software that’s not available via the cloud can be tedious. It requires a lot of manual data entry and can suck up far too much of your time and effort. This doesn't add value, and takes the fun out of being in business. Cloud software can save your company time and money.
2. When you should hire an accountant
Accountants can help out at various stages during the growth of your business. They can handle much more than just your payroll and tax returns. So when should you consider hiring an accountant for your small business?
Challenges for growing small businesses
There are good reasons for hiring an accountant at different stages of your company's growth. From a business plan to company formation, loan application to government audit, an accountant can make life easier for you at each step.
That doesn't mean you always need to employ an accountant full-time or hire one on a retainer basis. Sometimes just a couple of hours of their time will be enough.
Like all small business owners who are looking to save money, you may think you can’t afford an accountant. But look at how long it would take you to do certain tasks (such as taxes), and ask yourself, is that a good use of your time?
For example, let’s say it takes you 10 hours to do your taxes, and your time is worth $100 an hour. That’s a cost of $1000 to do your taxes yourself. And there’s always the risk you’ve made errors – especially if you’re multi-tasking like most business owners.
However, if you get an accountant to take care of time-consuming tasks like taxes, it’s quite likely they will cost less per hour than you would pay yourself. You’ll not only have extra time to free you up to generate revenue, but you’ll have peace of mind that an expert is taking care of the details.
So what other moments during the life of a typical small business, might you want to hire an accountant to help you?
You’ll need advice when you write a business plan
If you involve an accountant while you're writing your business plan, they will be able to use accounting software to add financial projections and other reports to it. This will help you create a business plan that's realistic, professional and more likely to succeed.
Hiring a professional at this early stage will mean you get the benefit of their financial knowledge and advice right from the start. That could save you time and money compared with hiring one later.
Click here to read more: https://www.xero.com/resources/small-business-guides/accounting/when-to-hire-accountant/
3. 10 monthly tasks for good business health
10 tasks to keep your business in good health
This monthly checklist will help you assess the health of your business and stay in control.
- Step back and do a financial overview
Your business won't survive unless you have a tight grip on your finances. Make sure you carefully manage:
- expenses and bills – pay quickly to ensure goodwill
- invoices – chase all late payers
- payroll – ensure all staff records are up to date
- taxes – file your returns and pay on time, every time.
- Review account statements from suppliers
Are your suppliers charging a price that’s fair? Are you still getting good value for money? If not, it might be time to look for new suppliers.
- Review annual sales
Look at your year-on-year sales. Are you doing better than the same time last year? Are costs and profit levels where they should be? Refer to your business plan and make changes if necessary.
- Keep a close eye on stock
If you're running a retail or manufacturing business then stock is your lifeblood. You should:
- carefully match stock levels to sales forecasts
- make special provision for perishable goods
- ensure storage is safe and secure
- work with your accountant or bookkeeper to find the optimum stock levels.
- Make sure your customers remember you
In a crowded marketplace, customers are likely to forget your service or product, so help them remember:
- Use a CRM (Customer Relationship Management) or MAS (Marketing Automation System) tool. This will help keep your customers and partners up to date with news about your business.
- Use all available communication methods. For example, email newsletters are a highly effective way of keeping in touch with customers – as long as they're well written.
- Spread the word about your business on social media
Social media can be a very effective marketing channel if you use it regularly. Make sure your blog always has fresh content, send new tweets and post on Facebook and LinkedIn.
- Review your website traffic
Google Analytics is a tool that makes it easier to understand your website traffic. It will identify pages that are performing poorly and pages that are doing well. Ask a web developer to help you if necessary.
- Keep on top of industry news
Set aside two hours a month to review industry news. Sign up for Google Alerts and set an alert so that the news comes to your inbox. If you are a consultant in the medical industry, you could set one up for ‘medical trends’ or ‘new technologies in medicine’.
- Keep your data safe
Use cloud-based applications to store data and ensure your information is always available and automatically backed up. Relying on your hard drive leaves you vulnerable in the face of burglary, fire or natural disasters. If you use your hard drive to store data, make sure you do at least one monthly backup online or to an external device.
- Talk to your advisors
Arrange meetings with your accountant or bookkeeper, board of directors and investors. Meet them at the office or a cafe for a half-hour chat over coffee. Review business performance for the last 30 days and last quarter to check you're on track.
Successful business owners have great habits
Set yourself up for success and get into the habit of setting aside time for monthly tasks. Business can move at a rapid pace, especially in the first year. So make this checklist a priority to ensure your business is going in the right direction. This will keep things on track and in control – which can make all the difference
Quote of the week
If you need a financial
advisor or counselor look
for someone with the
heart of a teacher.
By Dave Ramsey