Recently I presented to a group of 50 Business People for The Parramatta Chamber of Commerce and Industry at a Business Breakfast on the topic of “the Cloud a Disruptive Storm or Ray of Sunshine.”
During the Q & A time, an attendee stated, “But isn’t it about policies and procedures, surely, changing the accounting program to the cloud will not alter anything!”
I think cloud based accountancy programs like Xero make a big difference and here is why. The technology advances that have led to things like email, internet banking and smart phones have changed the way we do things and for the better.
Cloud based accountancy is a quantum leap forward and provides a better way for SMEs to manage their businesses.
The best decisions are made with the best information; strong financial management has always been based on accurate and timely information.
I strongly believe that cloud based programs like Xero underpin strong financial management and this is why.
Ease of use and smart features
Being easy to use and intuitive makes bookkeeping tasks less onerous and time consuming; a great help to small business owners who tend to be time poor. Examples of some of these features which make the task of record keeping easy are automatic bank feeds, memorizations of transactions, and recognition of matching entries, which suggest a match of a deposit to an outstanding debtor.
Collaboration and real time access
Cloud based programs like Xero are accessible via internet connection on computers and smartphones tablets or smart phones. They enable multiple user access which allows for collaboration in real time by multiple people at different locations.
This means that real time compilation of transactions and information which was once only available to large organizations with very expensive software is now available to SMEs at low cost. A business owner can know what his sales are at lunch time, midafternoon or any other time of day.
The Xero dash board feature means that the cash position debtors and creditors can be viewed visually. This means time saving and accurate figures.
A shift from soul destroying paperwork
The convergence of accounting, point of sale, internet sales, CRM, logistics and project management without the chaos of un-integrated systems means that businesses are releasing capacity.
Some business owners use this to reduce costs by reducing staffing, others take advantage of that extra capacity and use it in areas which generate growth.
No matter what business owners do with that extra capacity, we are finding that for the majority of small business owners, having a system like Xero provides control, clarity and simplicity, which makes doing business a pleasure. These people are having a great life and enjoying extra time with family or perusing other passions.
As one business owner put to me “You have the time to think, you are freed from the clutter of work chaos and have the space in your brain to look at the big picture and know what it means”
A shift to planning and appraisal and getting better results
With more time available, business owners can focus on their business metrics, understanding what those numbers really mean.
We are now working with our clients to improve their operations in such area as cash flows profit margins and product mix; we do this by analysis and measurement. This involves developing budgets and cash flow forecasts, measuring activity in your pipeline, improving your conversion rates and so on.
Here is the real power of the cloud based system; whatever adjustments are made are going to be reported through the system very rapidly in a format which can be understood, this means that the result of the decision and adjustments can be measured and further adjustments made. A mistake can be identified and corrected, a good decision replicated and fine-tuned.
The end result is that a business owner can achieve their goal, be that making a lot of money or achieving a better lifestyle balance.
Michael Mekhitarian has over 20 years experience as an accountant. He is a founding Partner of ATB Partners. ATB has had offices in Parramatta for over 15 years. For further information www.atb.net.au, or email mike@atb.net.au
