The perils of shoebox accounting for SMEs
Small business offices around the country contain shoe boxes full of business receipts and invoices. As the months roll by and the data accumulates, your business is sitting on a growing problem.
I believe that maintaining financial information in a digital form is an essential survival tool and a competitive advantage for business for a number of reasons. Firstly, it enables a business owner to have an accurate picture of their financial health. Secondly, it helps understand what payables need paying and what receivables need collecting. It also saves time invoicing and communicating with customers and determining which suppliers are key to their business. Plus, it makes GST exposure and BAS time less stressful and tax returns a breeze.
Why shoebox accounting is damaging?
- Audit Risks - If you are subjected to an audit you will need to provide an auditor with all of the essential financial information relating to your business. This includes details surrounding transactions, statements, receipts and files. Having an unorganised storage system for this data can prove very timely.
- Expenses: It is essential that you able to track your expenses and costs monthly, so to ensure that cash flow don’t dry up.
- Overdue Accounts - Ignoring the need for an accounting system can make tracking accounts receivables a guessing game. Don't be in the business of bank lending. Misplacing a 90-day overdue account is costing you money.
- Lack of Data Security - How safe is your shoebox? Is it made from reinforced steel, fireproof and waterproof against major disasters? Important financial information needs to be stored on a removable disk and on a secured off site location. Never take a chance assuming it can't happen to you.
- Added Costs - Having an accountant or bookkeeper organise and compile your accounting data at year-end can be costly. It certainly pays to organize your own invoicing, accounts payable and accounts receivable.
- Out of the office - In the current climate of on-the-move technology, being able to manage your financial data from any device via the internet is an essential commodity in today’s digital age.
It is due to my strong feeling that small businesses need to step into the digital age with their accounting that has led to my decision to partner Netregistry with Reach Accounting. Reach offers a cloud based software platform – which means it is provided to you via the internet, in the cloud, accessible from anywhere.
Reach Accounting is a fully featured application created by a small Australian business for small business. The software includes Invoicing, Suppliers, Payroll, BAS and Tax Returns, Bank Reconciliations and all the management account reporting you’d expect. What’s more it combines all of these great functions in a simple and easy to use platform.
I have been using Reach for some months for my own investment property and I can tell you it is fun to use, a relief to have all my records housed in one secure place, an eye opener as to my actual financial performance and overall a good investment of my time.
I will continue to be one of Reach Accounting’s many active, loyal subscribers for years to come and I hope you’ll join me.
Netregistry are providing a 2-year Reach Accounting licence free of charge to all our customers for the duration of their active subscription to Netregistry Group services.
To find out more and get your FREEonline software click HERE