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What is an accounting system?
What is an accounting system?
An accounting system is a software application designed to manage and record financial transactions, process accounting data, and generate financial reports. These accounting systems typically include functions such as bookkeeping, invoicing, bank reconciliation, financial reporting, inventory management, payroll processing, and more. They allow businesses to automate many of their accounting tasks and streamline their financial processes, which can save time and reduce errors.
If you run a business in Australia, you may already have one.
If you run a business in Australia, you may already have one.
Because most businesses in Australia need an accounting system, they are paying for one, although some business owners may not realize they are doing so, as the fees are often included in the overall accounting fees. It can cost somewhere between $30-$200 per month, which accounts for a few hundred to a few thousand dollars per year. Additionally, the accounting system usage fee is usually paid by business owners, so they can change their accounting specialist but keep their financial data. If you are unsure if you have one, ask your accounting specialist today!
Using an accounting system is not too hard.
Using an accounting system is not too hard.
Although many small-sized businesses have an accounting system, some business owners think it is only for accounting specialists and should not be touched. However, accounting systems have many useful features for business owners. They show how much money is in your account, how much you are expecting to pay/receive in the future, and who is paying you on time and who is not. All this information is available with fancy charts and graphs, making it easy to understand.
What happens when you do not use it by yourself?
What happens when you do not use it by yourself?
Unfortunately, some business owners do not have access to their accounting system at all. They still need to undertake business practices, so they issue invoices manually on Excel. They may be unpaid for a long time, or a refund may be requested. Over time, they lose track of what their clients owe them and what they owe their suppliers. One day, they receive an angry email or phone call and end up fighting. This happens repeatedly, and they get fed up with their business.
This is not what I want to see. Plumbers can be in trouble if they constructed a leaking bathroom, but they should not spend too much time researching unpaid bills/invoices/credit notes. They should be able to spend the majority of their time improving their skills and providing good service.
These businesses often have a bookkeeper reconciling their bank accounts very infrequently, such as just once every quarter. If it is reconciled every quarter, they might be able to pay taxes on time. However, how can they check their financial status if the data is not up-to-date? They cannot, so they end up having another system outside of the accounting system and try to keep it up-to-date. They are double-handling everything in this way!
What should you do?
What should you do?
Find out if you have an accounting system.
Ask your accounting specialist to issue you full access to the accounting system.
Check if the bank statement in the accounting system is up-to-date (so you know up to which date the data is included in the system).
Check up to which transaction is reconciled (not-yet-reconciled data should not be trusted).
Access the accounting system and enjoy! If you are unsure how to use it, do not add/edit data. Just view it.
My suggestion is not to be afraid of discussing matters with your bookkeeper or accounting specialist. You might be able to save a fortune or even your business in the future with just a few hours of discussion. Take control of the accounting system by yourself and utilize it wisely. It is there to save your money and time - not to make you double handle everything manually. If you have questions about the use of the
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