Real time accounting offers many benefits for business owners! It is something we implemented at The 500 Group and advocate to our clients.
From a business perspective, real time accounting:
- Puts you in control
- Provides “real time” financial information to help you make more informed business decisions
- Saves time and significantly improves productivity
When it comes to finance, it can also make a business far more attractive to Banks.
From our experience real time accounting makes good business sense!
What is Real Time Accounting?
Real Time Accounting is about recording your business financial transactions as they occur (or shortly thereafter).
Today this is typically achieved by using online accounting packages such as Xero, QuickBooks, MYOB etc.
This contrasts with the historical approach of waiting for a Bookkeeper or Accountant, to update records on a monthly, quarterly, or even an annual basis.
Real Time Accounting delivers business owners powerful, current financial information to help make more informed decisions.
The Benefits of Real Time Accounting
- Easy to use
- Saves time and improves productivity
- Facilitates informed decision making
- Easy to issue and pay invoices – monitor payments
- Provides early warning when things are not going to plan
- Pricing and strategy can be adjusted before it becomes a major problem
- Links to Bank feeds
- Makes BAS easy
- Effortlessly produce reports as needed (Profit & Loss, Balance Sheet, Debtor and Creditor listings etc.)
- Accountants can be given access to review data and/or prepare BAS or Tax Returns etc.
- Provides a sound foundation for financial forecasting
- Is very cost effective
Use Document Capture to Multiply Benefits
At The 500 Group we use Xero as our accounting software, and link this to the online document capture platform, Hubdoc.
Linking accounting software with document capture packages, simplifies the process – makes it easy!
With Hubdoc you can:
- Simplify data entry
- Use their App to take photos of receipts. These are then automatically pre-populated ready for checking and allocating to the appropriate Xero expense account
- Alternatively, you can also email receipts to Hubdoc and follow the same process
- Have clients or suppliers’ email invoices to Hubdoc which are pre-populated for easy allocation to Xero and payment
- For regular suppliers, you can set the system up to recognise the expense and pre-allocate it to the Expense Account
- Easily process expense claims and reimbursement
- And more
Using Hubdoc combined with Xero takes the pain out of maintaining your financial records.
You simply load data to Hubdoc and then allocate it to the appropriate Account in Xero by clicking a couple of buttons!
Real Time Accounting and Banks
When seeking finance, being able to provide current financial information is critical if you want a favourable response.
Bankers are financiers – and financial data is the language they understand!
Too often Banks are asked to make lending decisions against dated historical financial information.
If the information they receive is dated, or unavailable when requested, it makes it very difficult to achieve a positive outcome and in a timely manner.
From a financing perspective, Real Time Accounting allows you to demonstrate you are in control of the financial side of your business. That you have the tools to:
- Quickly identify problems and take early remedial action
- Effectively monitor and manage cashflow
- Make informed business decisions
- Provide information quickly when needed
- Develop financial forecasts based on current performance
- Better manage the financial risks associated with your business
Implementing Real Time Accounting
The best person to speak to about moving to Real Time Accounting is your Accountant. They can:
- Provide guidance as to which Accounting Package, and addons, are best suited to your business.
- Ensure it is set up correctly
- Provide training that may be required to ensure you get the most from your investment
Summary
Online platforms like Xero, combined with Hubdoc, provide business owners with powerful, easy to use tools to help manage and grow a business.
Whilst set up and some initial training is required, it does not take long to master!
When it comes to your loan application, whilst Real Time Accounting cannot guarantee approval, adopting this best practice for your business, will certainly be to your advantage!
If you would like to learn more about how Real Time Accounting could assist your finance application, don’t hesitate to get in touch.
