Good bookkeeping is like a navigation system for your business, giving you a clear picture of where you are so you can get to where you want to be.
But staying on top of your spending doesn’t have to mean hours spent pouring over a calculator and spreadsheets – it can be as simple as linking your bank accounts with your accounting service.
Accounting software services such as Xero, MYOB and Quickbooks allow you to integrate your bank feeds, either through the software provider itself or through your online internet banking portal.
Here are three ways taking this step could benefit your business.
Keep track of your cash flow
On a given day, the most important question for any small businesses is: What is my cash flow position?
And just as important from a cash flow perspective as “What’s hit my bank account”, says Xero Financial Industry Director Ian Boyd, is “What am I expected to pay out?”
Linking your bank feed to your accounting service means you’ll have all of that incoming and outgoing information in one place.
Get clear visibility over your business’s health
Having a clear, up-to-date picture of what’s going out, what’s coming in and where you’re at is an excellent good short-term barometer of the health of your business. And that can lead to better decision-making.
“If I don’t know where I’m at then I might go for the additional coffee machine for my cafe, when I actually can’t afford it this month because I’ve got payroll coming out and another couple of big bills due,” Boyd says. “So having this visibility helps give small businesses the confidence to make the right decisions at the right time.”
Build better strategies for future growth
It’s not just short-term decision-making that integrated bank feeds can assist with, and it’s not just business owners who’ll find the information they provide invaluable.
“Most of our small businesses have got an accountant or a bookkeeper helping them out and it really helps them to advise their customer, to give them really sound business advice, if they can see what’s going on,” Boyd says. “If you’re not getting those bank feeds in, or you’re not seeing that transaction data on a day-to-day basis, you’re flying a bit blind as an advisor and it’s very difficult to help make those calls.”
For those a little more future-focused, connecting your accounting software to business forecasting and reporting apps such as Spotlight and Futrli can help you make smarter strategic moves over the longer term, too.
“Not everybody is looking to grow – some people are quite happy with the business they’re doing today,” Boyd says. “But if you are looking to grow, or if you’re looking six to 12 months down the track or even further, these apps have a data-driven approach to that cash flow prediction which is really useful and, in some cases especially season businesses, vital to accurately project where you’re going to end up.”
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