Accounting-Software-Specialist-Analysis

Using Work-Arounds To Find Solutions

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Work-arounds are solutions that are not normally achievable by accounting software without a bit of knowledge, experience and thinking outside the square. But they are possible in most cases.

I would create work-arounds on a regular basis for business owners to get what they need from their softwares.

Having worked with accounting software since 1993 I have seen a few things and had to find solutions when a solution was not obvious.

I think the most work-arounds I had to create was when I worked for a vending business (back in 1996) that repeatedly purchased bulk amounts of vending machines and the owner wanted to get reports for all sorts of variables – by product, by machine, by filler, even by who the machines were bought from. It started to become quite a matrix of information. By using the different fields within the screens and reviewing which report would give me the information which was outside of the normal use of the reports. Then we had to calculate commissions of the sales and create a RCTI for a purchase, which back then was not available in the softwares. Let alone the use of Identifiers and Custom fields etc.

I always loved the challenge of finding a workable solution with what we had.

Even just getting Inventory quantities and unit values back to the correct amounts is a mixture of inventory adjustments and journals to inch our way back to a correct starting point.

We can use the export and import functions to find solutions. Another client I used this method for wanted to replicate the sales information in one MYOB file as purchase information in another MYOB file. By creating a procedure and manipulating the information exported, tweaked it then imported it into the second file. This saved the user 5-6 hours a few times a week due to the volume of transactions. The export came out as Item invoices and the import went in as Service invoices.

So if you have a problem that needs a solution call Katrina from Accounting Software Specialists on 0414 823 862.

Accounting-Software-Specialists-Profit

Is Your Income Making You Money?

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Every business that uses accounting software should be able to get regular reports that provide information in a coherent manner and in a way that can drive a business to success.

It’s all in the setup of the Chart of Accounts. If you have a messy, unstructured and inaccurate Chart of Accounts you will have the same in your resulting reports.

Does your Profit and Loss tell you where you are making money?

1 Know what your drivers are in your business. What are your major income earning items or services? Does the Income section of your Profit & Loss reflect your main income-producing areas? If not then I suggest you review what they are and create new accounts for those main areas. You may only need 2 or maybe 6 is more appropriate. You know your business and you know what these areas are. Create a new line in your P&L and direct the sales invoices to these new accounts. You may get a surprise at the end of the year to know that you are earning less income in areas you are placing most of your effort or marketing dollars.

2 Use the Cost of Sales (COS) area in your P&L to provide you with how profitable your income-producing areas are. COS are those direct expenses that you have incurred to create those sales. Not all businesses need COS, for example small service based businesses may not have direct costs to earn its income (other than wages).

I challenge you to review your current results and see if you can identify direct costs and whether it would be helpful to separate them from the general operating costs of a business. Now that you know your main drivers and have separated them into new Income accounts you can do the same for the COS. What are your expenses that directly caused the sale to happen? The use of COS works really well when the business sells products. In this instance the COS would be the purchase of the product. And the difference is known as the Gross Profit of which you can create a margin and compare across periods of time. I would not suggest creating an account for each individual product but maybe for each group of products.

I assisted a business that did have an account for each of their dozens of items and the P&L was 9 pages long and hence not used. We consolidated it down to 8 groups of product which brought the P&L down to 2 pages. Then we could compare Sales & COS of like groups and see which group was profitable and which was not. If you maintain Inventory management on a perpetual method you can report on each item’s profitability and margin to weed out the least profitable.

In a service industry you may like to put your contractor costs into the COS area or even the wages attributable to making that sale. When I owned a bookkeeping business I did exactly that. The staff costs (including super and staff amenities) were in the COS along with subscriptions and products that I on-sold. My staff were making the income and were the major cost of my service business and I was looking for a 50% margin to cover my overheads and the profit I desired.

If you need assistance with getting this right and then setting KPIs to monitor your business’ performance please contact Katrina of Accounting Software Specialists on 0414 823 862.

Accounting-Software-Specialists-Cloud-Computing

5 Reasons To Use Cloud Accounting

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OK, everyone is talking about Cloud Accounting.

If you are in business and haven’t heard of Xero or MYOB Account Right Live or bank feeds by now you have been a little out of touch.

In my experience Xero has been the major contributor to cloud accounting, benefiting 1,000’s of businesses across the globe. SMEs are the winner and an astute business owner will take advantage of the many benefits of this progress.

So what is Cloud Accounting?

Well to put it simply it means accounting software users can access their software remotely through the internet. Accounting software, both the programs and the data files, are hosted on remote servers. No longer do you need to install or maintain a program on your computer or be sitting behind your desk at your computer to see real time data.

A business owner benefits greatly from this new wave of accounting software.

1. You no longer need to purchase accounting software upfront. Modern accounting software uses a subscription model. Not a major benefit in my eyes but for start-up businesses it can be helpful for cashflow.

2. Unlimited users on the data file simultaneously. That’s right no more fighting for a login or waiting turns. And no more sending the data file to the accountant, to then have to duplicate the differences into the live file. It can all be done live while you continue to do your daily transactions and reconciliations.

3. The biggest kicker for me is the bank feeds. This means the transactions that have gone in and out of your bank account will automatically appear in your accounting software. No longer do you need to enter each piece of paper or transaction from a bank statement, the use of cloud accounting enables your system to prefill the information – daily.

4 .Daily bank feeds result in more accurate and up to date information so you can see your financials in real-time. You don’t have to wait for your bookkeeper to turn up each month to know what the figures are.

5. Use of rules and cash coding within your accounting software allows for faster data-processing. This may reduce your bookkeeping costs or even better allow your bookkeeper to give business advice in real-time or concentrate on other services you may not have wanted to incur extra costs for, such as debt collection.

Cloud accounting has made bookkeeping more streamlined and automated, faster and more user-friendly. Gotta love progress!!!

If you want to take advantage of these benefits contact Katrina from Accounting Software Specialists on 0414 823 862