When BIT interviewed Receipt Bank country manager Sophie Hossack, we asked for her thoughts on essential cloud accounting and bookkeeping tools for small business. What's the toolbox every small business should keep on hand, to maximise the potential of the cloud? Here are the elements to consider.
1. Cloud Accounting
Cloud accounting is becoming increasingly popular, and has two main advantages: you're not tied to a particular computer where the data is stored, and your accountant or other adviser can work on your books without having to copy the file and then merge any changes. Hossack specifically mentioned Xero and QuickBooks, probably because Receipt Bank integrates directly with those two, but there are others. MYOB Essentials and AccountRight both include MYOB's own bill-processing capability, and Saasu works with Receipt Bank competitor Shoeboxed. (BIT previously reviewed various accounting packages and has also discussed receipt-handling services in more detail.)
2. Invoice Automation
Hossack noted that for Australian businesses, the average debtor days is 100. That is, 100 days on average elapses between issuing an invoice and collecting the money. The problem is that the organisations that small businesses owe money to - landlords, utility companies and other suppliers - usually offer less generous terms and enforce them more aggressively. So it's important to do what you can to ensure you are paid promptly.
The first step she suggested was to automate the sending of invoices. This doesn't affect how quickly an invoice is paid after it is received by your customer, but it can help your cash flow. If you've agreed 30 day terms and a customer routinely takes 45 days to pay, that effectively blows out to 60 days if you don't send the invoice until a fortnight after you've performed the service or supplied the products. So look for ways of automating subscription-style invoices if you run a lawn-mowing or dog-walking service, for example, and for ways of automatically generating and sending invoices when you record that a job has been completed, perhaps by using a mobile app that works with your accounting software - that can be particularly convenient for tradies and similar businesses.
3. Create Payment Options
The second is to make it as easy as possible for customers to pay you. Hossack mentioned Ezidebit, which handles payments via direct debit and Bpay, and there are various other payment gateways for receiving online payments - we've previously covered eWAY, and some accounting software (including Xero and MYOB M-Powered Invoices feature) integrates this capability.
It's also possible to automate payments, so when an invoice has been entered into your books (either manually or via the automated approaches outlined above), you schedule a payment date - probably the day it is due - and then the software triggers the payment and sends a remittance advice. This is available with Saasu, Xero, and some MYOB products let you schedule .
4. Automate Everything
Automate everything you can, Hossack advised. Using your accounting software's bank feed capability makes a big difference to the amount of manual processing required, especially if you avoid paying cash wherever possible. And look for integrations between the products you use or may find useful. As already noted, Receipt Bank can automatically feed into Xero and QuickBooks, but you'll also find various products in areas including employee rostering and timesheets, POS, expense management and field service that can connect to accounting software in order to improve efficiency.
5. Even work in the Cloud
She also recommended Google Apps as a way of improving collaboration. This can work within a business, or also between a business and its suppliers or customers. Office 365 offers similar capabilities.
Finally, keeping all your files on a service such as Google Drive means they are accessible from any internet-connected device, drastically reducing the risk of not having the right documents with you when you're away from base (not that all small businesses have a physical base any more). BIT recently compared Google Drive and similar services .
