Many businesses are preparing for the ongoing digital transformation regardless of the company size. If there is one goal that these businesses are trying to achieve, it is saving time and money while also increasing convenience and productivity. Invoicing is probably one of the most challenging bookkeeping tasks that bring stress to business owners. Chasing after clients and making sure that all bills are paid require multi-tasking and bookkeeping skills. For these regular tasks to be easier, moving to online invoicing is a great decision. Here is why using online invoicing software is advantageous to businesses:
Filling out a spreadsheet is time-consuming because you need to make sure that all of the essential information is properly entered. Aside from the invoice number and an itemised list of products and services, you will need to review everything to ensure that you are not making any mistakes. You will not only deal with one invoice but multiple invoices. All of these repetitive tasks can be lengthy. Switching to online invoicing software gives you a faster way to deal with your invoices. Since all client information is saved in the cloud, it is easy for you to keep track of your invoices. You will also know the client’s payment method and payment terms. You just need to log into your account and choose the client you want to invoice.
When your files are stored on your computer, access to invoices become limited unless you are in front of your computer. With online invoices, you can access information anywhere and from any device. You will only need to log into your account to find out which clients you have to start billing. You will have the ability to send invoices at your fingertips.
Another advantage of online invoicing is its automation. This feature allows you to set up recurring payments for your long-term clients. The automation spares you the headache of reminding your clients about their payment dues. The system will send follow-ups and reminders for past-due invoices. Saving time and money lets you focus on growing or expanding your business.
When your computer crashes, you will also be saying goodbye to the most important files because you failed to create a back-up. Online invoices give you peace of mind because the software is extremely secure. It safeguards files against interference and loss.
Errors are inevitable when processing involves several steps. Digital invoicing reduces errors and disputes because the total amount to be paid is calculated. It also adds the taxes to ensure that clients are billed correctly. In the event you make a mistake, errors can be corrected in minutes.
October 31 is the deadline for lodging tax returns and yet some people are still making up the boldest excuses just to delay payment.
With only less than a week left to lodge returns, the ATO expects to receive the lamest excuses for failing to lodge tax returns on time. In recent years, a company claimed that their paperwork flew out the car window when they were on their way to see the accountant. There was even an excuse that the business owner had a condition that only permits 30 minutes of work each week.
There people that will even go to a certain extent of putting the blame on other people. One late lodger claimed that the reason for the delay was because his wife burnt everything that belonged to him including his tax records. Another ludicrous reason was that the lodger’s accountant has gone to prison while he was still working on the tax returns. He could not access the computer either.
A back injury also deterred another confused Aussie from lodging tax returns in a timely fashion. The lodger failed to lodge between 2008 and 2015 due to the injury he had to endure. Others are bolder and would even use the recent death of his father as an excuse for the delayed lodgement. Although this sounds reasonable, the ATO found out that he previously used the same excuse.
The ATO has made it easier for Australians to lodge their tax returns. If they cannot lodge on time, there are still ways that the ATO can provide help. Online options and apps are also available so lodgers no longer have to leave their office for a short trip to the ATO. Data-matching technology makes it faster for everyone to fill out their information including dividends, bank interest and wages. The pre-filled information bypasses all the hard work that you need to undergo in the past. All you have to do is to double-check the information to ensure it is correct.
The ATO encourages early lodgement of tax returns because, in the event of making mistakes, errors can still be corrected before the deadline. The ATO also advised lodgers to get in touch with them should they have problems with paying their tax debt. They are willing to create a payment plan tailored to the lodger’s ability to pay. Setting up a payment plan online is also possible, but it will still depend on the lodger’s situation.
Companies around the world have highly anticipated the need for digital transformation as it is taking shape in all aspects of operation. Over the next five years, massive change will be evident. Digital Darwinism’s tight grip is proof that the pressure to transform continues to intensify. However, not all organisations can adapt fast enough.
In a new global survey conducted by Harvard Business Review Analytic Services, with 376 business leaders participating in the survey, almost all of the participants believe that the pressure to transform will only increase day after day. Although the benefits of transformation have been continuously highlighted, many businesses are still having apprehensions and are not 100% open to change. So what keeps these organisations from embracing digital transformation?
According to the survey, only 7% of business leaders are extremely open to change. Most businesses fear that their inability to change fast enough will reduce their chances for survival. About a third of respondents admitted that their organisation has not completely switched to digital technology.
The path to embracing digital transformation is not easy. This is because changes in systems, structures and processes must be taken into consideration. There is also a need for greater investment in culture change and employee support. It is also essential for IT departments to move into leading roles to keep an eye on innovation. There is also a demand for aptitudes, ways of working and new skills. Without a doubt, digital transformation does not offer one-size -fits-all solution. There is no exact timetable as to when an organisation can completely adapt.
These are the steps to preparing your organisation to digital transformation:
It is difficult to introduce change to people if they do not know its purpose and benefits. Everyone in your organisation should understand why a change is necessary for your company. Communicating your strategy will also help you prepare for the next big change. Since change is the only thing inevitable in this world, your company should develop a culture that welcomes change.
The survey revealed that 89% of respondents are already taking steps to creating new organisational structures and teams that will support business models and digital operations. The structure needs to be kept flued so it will have the ability to keep up with the dynamic nature of the digital economy.
Digital innovation should be embraced rather than feared. Digital organisation should take the transformation a step further by exploiting data in different ways. The shift will also make way for organisations to develop faster responses and use assets to the fullest.
Most legacy IT systems are rigid and slow for digital organisation. Speed is important for digital business. Aside from using new technology, organisations must also take the time to rethink IT’s role. IT should be introduced to new business models, services and products. It is expected for IT people to collaborate closely.
Automation is one of the biggest trends that made a mark in the bookkeeping industry and with its rapid growth, it is no surprise that many business owners no longer hesitate to grab hold of this new opportunity to keep their financial activities in check. Although human adoption seems to be slower as some businesses are still keeping traditional bookkeeping systems, incorporating automation into your workflow makes a huge difference. Here are three reasons to introduce automation to your bookkeeping system.
Small business owners try to reduce expenses by handling all of the tasks as much as possible. However, as the company grows, businesses find it difficult to keep up, hence a bookkeeper becomes a need. One bookkeeper cannot handle all the workload and hiring another bookkeeper means spending more money. Automating your workflow will help you standardise your process so you don’t have to worry about your financial status. The information you need from your monthly bank statements will be available for download.
Reducing repetitive tasks is one of the benefits of automating your bookkeeping system. Imagine how much time you can save from doing away with manual jobs. Automated bookkeeping allows you to generate accurate information that you can access and review at your convenience. However, it is important to remember that automated coding does not necessarily guarantee accuracy as you still need to review monthly transactions. Keep in mind that the purpose of automation is to finish a bookkeeping task the quickest way possible, but checking information to ensure there are no missing transactions is still required.
The best thing about automated bookkeeping is that you will no longer have to wait for your bookkeeper to provide you information because you can gain access to valuable information using a cloud app. You can even meet with clients monthly to discuss trends and results based on the financial reports you have gathered. As a result, you can set a plan so you can handle cash flow wisely. Keeping the books up to date will never be a problem because it only requires minimal management. With less time and attention required in keeping numbers up to date, you can surely take care of other aspects of your business.
One thing that deters some small business owners from automating bookkeeping is the fear of replacing the bookkeeping work. Since you switch from traditional to modern bookkeeping, you need to learn new processes to appreciate the benefits that automation provides. In the long run, business owners will be able to understand how automation can improve their lives.
Most small business owners have big hopes and dreams about growing their business, but only a small fraction of entrepreneurs reach the peak of success. Too many of these businesses fail. It is a sad fact that 60% of small businesses could barely operate within the first three years of starting according to the Australian Bureau of Statistics. Sole proprietors have much lower survival rate than other types of business ownership.
Since there are only a few businesses that flourish, what does it take to survive and thrive? Successful business owners have a set of best practices that they regularly follow: investing in the right business tools, setting goals, planning for business growth and the list goes on.
In cases where business fails to grow, there are top 4 reasons they could not survive:
Small businesses have to keep track of every transaction especially if it involves money. Having systems and processes in place ensures products and services are consistently managed. Small business owners are responsible for inventory management, accounts payable, accounts receivable, marketing, payroll and more. Unlike large companies that can already afford to hire people to do these jobs, small businesses have to juggle these tasks at the same time. There are three things that failed small businesses fail to implement: comprehensive bookkeeping process, customer relationship management system and inventory management system.
It is difficult for business owners to open doors to new customers without sufficient funds. Most businesses fail because they underestimate the amount of cash it takes to maintaing a business. Financing supports inventory purchases, business expansion, startup costs and business improvements. It is imperative that you plan the amount of capital that starting a small business requires. This way you can anticipate other expenses without breaking the bank.
Even if your small business has savored its initial success, it does not guarantee continued success. When you fail to monitor industry trends and changes, this is when you start falling behind your competitors. It is not uncommon for small business owners to wear many different hats and struggling with managing their time. This is why preparing for the changes becomes takes a backseat. When one area becomes obsolete, all aspects of the business become affected. Small businesses must be prepared to beat the competition by staying ahead of market trends.
When it comes to marketing your products and services, taking advantage of modern technology is necessary. It is difficult for small businesses to compete with big company because they do not have data-driven marketing. Even a simple task such as creating a website matters when it comes to keeping your product available to prospects. If your business does not have a mobile-friendly website, it will be difficult for you to keep up wth the giants in the business industry.
If you are the type of business owner who looks over your shoulder, checking whether or not your employees are committing fraud is a sign that you are experiencing embezzlement. It has been found that 28% of small business owners have experienced embezzlement over the years. This is alarming because before fraud can be committed, an employee has to earn a business owner’s trust. Embezzlement is costly as it results in paying penalties and interest on underpaid or unpaid bills and taxes.
Bookkeeping reduces the risk of embezzlement. Also, you need to check reports regularly even if they are delegated to to a bookkeeper. Since you are the business owner, you will be the one who will get assessed interest and penalties especially for missed tax payments. The ATO will chase you for the unpaid taxes.
Unfortunately, frauds are discovered when it is too late. The good news is you can limit opportunities for theft with these following steps:
Anyone can pretend to be a great employee and even fake credentials. Business owners must make it a habit to run a background check before deciding on hiring a bookkeeping. You will never know an employee’s reputation unless you take time to know them.
It is difficult to monitor signs of fraud if you delegate responsibilities to one person. Responsibilities must be separated or assigned to different people so you can easily check if there are traces of fraud.
More often than not, fraud is committed through checks and credit card. These transactions will only be discovered if you check the transaction history. Business owners must take the time to set up automatic payments, review reports, pay bills electronically, avoid signing blank checks and use secure checks.
Aside from monitoring reports, it is also important to monitor accounts receivable, accounts payable and payroll. Accounts receivable refer to open invoices while accounts payable refers to unpaid bills. Payroll must also be monitored such as the deductions, commissions, wages, overtime and timesheets.
It takes time and effort to ensure fraud is kept at bay, but it is even more expensive to let fraud go unnoticed. Aside from penalties and interest, your company may also run the risk of going out of business because of cash flow problems.
Cloud computing is one of the business trends that continue to thrive. All kinds of businesses utilise cloud not only to connect with customers but also to make business practices more efficient. In a study conducted by Computerworld, 42% of IT decision makers increased spending on Cloud computing in 2015.
Bookkeeping is one of the aspects of your business that will benefit from cloud solutions. You can manage your finances easily and access data anywhere.
Although cloud technology is a buzzword, only a few will be able to understand what it really does to your business. Cloud stores data and other essential financial information, making it available to business owners and employees so long as there is access to the Internet. Unlike traditional bookkeeping software that requires one dedicated hard drive to store or record financial data, cloud bookkeeping software is Internet-based. With that said, it does not affect your existing storage.
When it comes to costs, cloud software is more affordable because it does not require additional software or hardware to run it. In the event your computer crashes, your data will remain secure because cloud-based bookkeeping programs will back up your data automatically. You can also use the cloud-based solutions on many different platforms, something that traditional bookkeeping software cannot offer.
As they say, cloud-based solutions are not for everyone. When you are making a buying decision, it is essential to assess your business needs before you invest in cloud bookkeeping software.
For business owners who are not familiar with on-premise financial system such as Cloud ERP, letting go of traditional bookkeeping methods is a difficult decision to make. Some concerns being raised include availability, security, ownership and location of financial data, software updates and getting used to a new financial system.
However, cloud does not give organizations a hard time adapting to change. Even smaller firms can use cloud bookkeeping technology without undergoing extensive training. It also offers a good number of benefits such as scalability and flexibility. You can even gain better control of your finances because information is available in real time.
Yesterday you were filled with enthusiasm, excited about the idea of running your business, but that excitement was abruptly replaced by disappointment as your boat suddenly sinks to the bottom. What have you done to make your business take a nose dive? What should have been done to ensure business survival?
It is disheartening to discover that 8 out of 10 small business owners fail within the first 18 months according to a study conducted by Bloomberg. At an alarming rate of 80%, you cannot help but ask: What did I do or What did I not do?
Another study also discovered that only 50 percent of small businesses barely make it to the five-year mark and only one-third survive the tenth year of running their business.
According to Forbes, each month, more than 500,000 businesses are started. Unfortunately, many of them fail.
Putting up your own business is not a decision you make on the spur of the moment. It takes years of planning and analysing. Everyone can say they have what it takes to be a business owner, but once they are confronted by problems with cash flow, taxes and payroll, they choose flight over fight.
Business management encompasses a lot of things. You can be good at selling, but hey, there are still other business aspects you should not overlook such as hiring and managing employees, purchasing, production and more. Did you make the cut?
When you start your own business, educate yourself on skills you lack. Also, do not forget about your employees. Without them, you will not be able to accomplish your goals.
Employee engagement should not be ignored. Be mindful of the leaders you hire to manage your employees. Do they encourage productivity or are they the reason for employees’ lack of motivation?
A business plan is critical to all businesses. Even if you are a seasoned entrepreneur, you are not going to be immune to problems. A business plan will help you analyse workforce needs, competition, budget, promotional activities and other business components. If you decide to expand your business, bankers will also request a business plan from you before you can secure additional capital.
What is your primary reason for starting your own business? Is it making a lot of money? Pursuing your passion? Spending more time with your family? These are benefits you reap from being a business owner, but you might have failed to realise that it will take years of hard work before you can savor success. When starting your own business, you need to have the right reasons: love and passion for what you will be doing, drive and determination and ability to face failures.
You may have the passion and skill to become a successful business owner, but without sufficient capital, launching your business will be a big challenge. Although it takes a year or two for your business to finally take off, you should also take the costs of staying in business into consideration.
Self-made millionaires have a positive mindset, determination and drive to succeed. They also view mistakes as an opportunity to learn and grow. There is no secret sauce to becoming a successful business owner. If you think that failure is never an option, you will do whatever it takes to succeed.
Bookkeeping may not be your top priority because your small business is not as complicated as large and established companies. One mistake that business owners make is taking bookkeeping for granted for the belief that it will not hurt a small business.
However, with the stiff competition going on, no business, regardless of size can remain complacent. If you dread bookkeeping, you no longer have to spend your day working on manual and repetitive tasks. Bookkeeping software will make your daily life easy. Unfortunately, choosing the right software can be complicated. Narrow down your options by considering the following points.
Before you can explore your options, you will need to analyse your budget. Depending on your business needs, the price will vary from feature to feature.
The more features offered, the more it costs. Avoid choosing software loaded with features if you are not going to use all of them because it will be a complete waste of money. Some software providers offer a free trial or demo so you will know the features you need for your business.
Aside from the features, you will also need to check how you are going to pay for the service. Additional updates may also require an extra fee. Find out if you can purchase packages with a comprehensive pricing structure. For most business, paying a monthly fee is the most preferred payment term.
Not everyone enjoys manual to digital transformation. This is why choosing the best software for your business also involves knowing how to use it. The right software will enable you to learn bookkeeping over a short period of time. You do not have to spend your workweek learning bookkeeping.
The right software helps you track your income and expenses. It will also help you record your daily transaction. If you cannot make smart financial decision, it only means that your software solution is not doing an effective job.
The digital era makes it easy for business owners to run their business even outside of the office. Flexibility brings convenience and as a small business owner, your software selection should also depend on the application’s ability to give you access to your financial information on your mobile device.
Aside from instant access to your reports, the software should also give you the option to share the information with your bookkeeper and business partners. While applications capable of giving you access to information from any device is a huge advantage, security must also be prioritised. Confidential records must be kept safe and secure. It will be useless to purchase bookkeeping software if it cannot create layers of protection to sensitive data.
Once you provide answers to these questions, the process of choosing bookkeeping software will be a lot easier for you.
A business tax return is best prepared by someone who knows the ins and outs of your business. Hiring an accountant gives you peace of mind when it comes to tackling one of the most challenging tasks of running your business. However, an accountant does not guarantee immunity to mistakes. There are many reasons your business can fail on making a business tax return.
Poork bookkeeping has a negative effect on your business as it involves record-keeping. Your company tax return is computed based on your records and when the task is handeed over another bookkeeper who seems to run through everything including making necessary adjustments, things can get really mixed up. For a seasoned bookkeeper, these tasks are just a walk in the part not until tax time. When the ATO knocks on your door, checking your records is one thing that make bookkeeping a tedious task.
Nowadays, bookkeepers no longer spend too much time on reconciling bank accounts, chasing unpaid debts, reviewing reports and others. Cloud services such as Xero allows bookkeepers to deliver accurate reports and ensure that superannuation is paid up. These are simple and basic tasks, but they are the ones that business owners often miss out.
Tax returns are usually due on May at the end of the financial year. Since your company has all the time in the world to prepare and lodge timely payments, there are still business owners who still lodge late. As a result of late payment, business owners suffer from penalties.
The good news is penalties can be avoided by ensuring that your tax affairs are in order. Having a good process is key to preventing problems associated with your tax returns. It is also imperative that you plan your tax bills in advance.
Cashflow is an important aspect of your business and just because you are the business owner does not mean you can borrow money from your company. Before making any decisions of taking the cash, take tax rules into consideration. Taking money from your company to cover living expenses can impact your business. Speak with your bookkeeper or accountant so you can obtain sound advice and recommendation.
Superannuation brings stress to business owners especially those who do not completely understand how it works. If you are still wondering whether or not you should pay super, checking out ATO’s employee/contractor decision tool will be a huge help. Knowing what you need to pay for will enable you to pay the superannuation on time.