Over the past decade there have been enormous leaps in the accounting technology available to business owners. Improvements to Xero and MYOB have provided greater access, visibility and control over your day-to-day data. This has led to a shift in the role of accountants from pure number crunchers with spreadsheets and calculators to hybrid advisors who assist with interpreting the information sitting at your fingertips and preparing reports for compliance and analysis.

The benefits of using accounting software, in terms of real-time data and cost saving, are significant for your average SME. But given the simplicity to initially operate the system and code transactions, how much time have you invested to learn the intricacies?

Are you treating your payables and receivables correctly? Do you have loans or hire purchases and are they being tracked? Are you splitting personal spending out from business expenses? Are your payroll expenses or payments to IRD going to the correct code? Is your Chart of Accounts fit for purpose? And after all that, how accurate is the information that comes out when you run your monthly Profit and Loss or GST report? Do the reports line up with how you think the business has been performing?

In today’s fast-paced environment, we are seeing an increase in clients who require analysis and advisory services with a short turnaround to assist with lending, shareholding, cash flow, profitability and growth. In many cases, we are asked to provide real-time advice taking the figures presented at face value. But if those reports are not a true reflection of the business, the resulting advice may not lead you where you want to be, or worse, it could be detrimental.

We commonly encounter situations where a client is using Xero and they are looking to drawdown a mortgage for various reasons. To facilitate this, the bank requires several reports showing the income and equity positions of the company. We are more than happy to assist and it should be a simple task. But if ledgers have not been looked after properly, the reports won’t show an accurate picture of the company’s activity.

The same principle applies when clients need a short-term lending facility to assist with cash flow, for example, during the pandemic lockdowns. Again, the lending provider wants reports as part of the application process, and ledger information needs to be up-to-standard to produce accurate reports. It can take accountants a significant period to tidy a ledger so that the reports are correct, which leads to a delay in approval and settlement, as well as increased accounting costs. Not to mention the stress, worry and anxiety that comes from these situations being drawn out. At the end of it, any savings from doing your own bookkeeping are now offset by our time fixing prior errors.

When we encounter these situations, we try to organise training in the relevant accounting system so that at any time, information is up-to-standard for decision-making, be it internal or external. Sometimes our offer is accepted and going forward, we see an improvement in the quality of the data. Other times the training is declined and we find ourselves in an annual loop of spending significant time sorting the same, easily avoidable issues.

When clients have a higher skill level around maintaining their accounting system, we can prepare useful and meaningful reports the next day and often have approval for a facility commencement shortly after. There is reduced stress, cost and difficulty at a crunch moment, all because the ledgers are ticking along cleanly week to week.

Which of the above situations more closely reflects your experience? You invest a significant amount of your time to upskill, train or improve in your chosen field with an aim to providing the best you can for your customers. How much time do you spend learning about the system you’re using to track your financial progress? Are there areas for improvement or efficiency? Tidier and more reliable data also opens up avenues to accurately prepare forecasts and predict cashflow to assist with future business decisions.

Quality information is an essential cornerstone to set, track and achieve your business goals and at Baker Tilly Staples Rodway, we are here to help. We are equipped to tackle the compliance work for you, but we can also offer training in multiple systems and empower you to embrace that NZ DIY attitude. And once you’re set up on your business journey, we are happy to put down our spreadsheets and calculators to provide advice as you work towards your goals.