People generally start their own business because they want to focus on what they do best.
Chances are you don’t list “balancing the books” in your skill set, so you’ve probably engaged the services of an accountant to help you keep your financial affairs in order. A good small business accountant is worth their weight in gold, but they’re not the only key to keeping your financial affairs in order.
It’s easy to become overwhelmed by the administrative side of running even the smallest of businesses. Tracking your finances in convoluted spreadsheets takes up a growing amount of time, time that you could be investing into other parts of the business. Alternatively you might dump all your paperwork in a shoebox and hope for the best, with no idea of how your business is actually tracking.
If your ad hoc financial system is taking its toll in terms of time and/or money then it’s probably time to get your financial affairs in order and make the move to a small business accounting package. If accounting software saves you even a few hours of admin each month, and helps you better manage your cash flow, then the return on investment is pretty straight forward.
There was a time when moving to an accounting package meant handing over your cash up front, but these days you’ll find that many small business accounting packages are cloud-based monthly subscription services. Traditional players like MYOB and Reckon (formerly QuickBooks) have embraced the cloud, but they’ve been joined by new players like Xero and Saasu.
Cloud-based accounting packages are designed to scale as your business grows. Some also let you integrate extra modules as your business expands, such as inventory and customer relationship management. Look for an accounting package that has the ability to expand to meet your needs, as switching accounting platforms can be one of the major growing pains as your small business takes off.
Your first step should be to talk to your accountant to see which packages they work with and recommend. You want to make your relationship with your accountant less complicated, not more, and some cloud accounting services even let you grant your accountant access to your data.
Also consider which accounting packages can interact with your bank, as some can pull statements directly from your online banking account to make life easier.
If you’ve survived to date on spreadsheets and shoeboxes then shifting to an accounting package will likely involve an awkward transition period. Today’s accounting solutions tend to be more flexible than in the past, making it easier to customise them to suit your business. But embracing an accounting package might also present the perfect opportunity to rethink the ad hoc way you approach your finances, and some painful changes might be for the best in the long run.
The great thing about cloud-based subscription services is that there’s usually no lock-in contract. You can test out a few to see if they’re a good fit for your business before you take the plunge. Some have also built up a strong community of users, with online forums to help you along the way.
If shoebox accounting is holding your business back then it might be time to call in the experts, so you can spend less time balancing the books and more time doing whatever it is you do best.