Cash flow, expenses and invoices are just some of the essentials SMEs need to be on top of at all times.
Most small businesses start with a great idea and a burning passion to build something – but keeping the books in order is not something that comes naturally to everyone.
Having access to real-time information on cash flow, invoices and obligations can make all the difference to small business success, says managing director of cloud based accounting software company Intuit Australia, Nicolette Maury.
“Real time bookkeeping, facilitated by cloud technology, can help SMEs understand their business on a day-to-day basis so they can address potential problems as they arise, and grow a more successful business,” says Maury.
Here are six key reasons why SMEs need to keep on top of the books in real time:
1. Cash flow – don’t get caught short
A small business which doesn’t manage cash flow adequately can easily go out of business, no matter how successful their sales are or their product, says Maury.
“Having a strong steady cash flow also allows them to know if they can invest, such as hire a new employee or do some additional marketing to help grow their customer base,” she says.
2. Expenses – what are you really spending on your business?
“Having a way of being able to track expenses can really help SMEs not only make sure their business survives, but help them get the insight needed to run their business properly,” says Maury.
“Those of us who have been in a small business know that it can be pretty painful and time consuming to track expenses. And that’s where being able to track expenses in real time can save an enormous amount of time.”
3. Profit and loss – the ultimate window into your company
The SMEs that survive have a better understanding of their profits and losses than business that don’t make it, say founder and CEO of cloud bookkeeping firm Cornerstone, Tim Hoopmann.
“I’ve always managed my business through assessing my financial statements,” he says. “It’s a window into your business and gives you an understanding of where you are in terms of working towards your goals.
“I believe that profit and losses are the ultimate marker for businesses.”
4. Invoicing – efficient invoicing helps you get paid quicker
“We have a saying,” says Hoopmann, “invoice quicker, get paid faster. I am often amazed at the lack of priority SMEs put on invoicing at the end of the job. It might seem silly but I’ve seen a lot of business who don’t.”
Hoopmann says that cloud accounting systems help businesses not only invoice with speed, but it allows time for owners to focus on big-picture projects.
“Having access to cloud software can really dramatically reduce the amount of time spent invoicing,” he says.
5. Payroll – keeping your obligations to staff
Real-time bookkeeping can help ensure you’re following legal requirements in terms of paying your staff, says Hoopmann. But it also has other benefits for your business.
“Sometimes the basic things when it comes to running a business make the biggest impact,” he says. “Making sure employees’ time is tracked, they’re paid on time, leave accrued, and super paid, all contribute to making sure you have happy employees.”
6. Compliance – missing your obligations can have dire consequences
Keeping your books in real time helps your business prepare for the future and ensure it meets its financial obligations, Hoopmann says.
“The future will always mean paying your employees, paying the government, your BAS, your super and all of those liabilities, but having that information in real time means you know you can meet those obligations,” he says.
“Sometimes a very, very small and unintentional slip, like not paying super on time, can have quite dramatic effects on a business owner and their business.
“I can sleep at night knowing that not only can I fulfil internal requirements of the business, but also my external ATO obligations – that’s the value of having information in real time.”
Find out how Intuit QuickBooks Online can help your small business succeed by visiting their website or calling 1800 618 521.
Written by: Jacob Robinson