Advances in accounting software in the last decade have brought radical changes to the accounting industry, improving productivity and providing next-level access to data for everyone from start-ups to e-commerce sole traders to global super brands. But, while accounting software platforms have the potential to save businesses time, improve accuracy and streamline processes, technology can only do so much. A flesh and blood accountant brings experience, knowledge, strategic know-how and an eye for detail that can help protect you from making costly, detrimental accounting and taxation errors, writes Matthews Steer Accounting Supervisor, Belinda Torr.
If I have accounting software, do I need an accountant?
Accounting software is a tool designed for a very specific set of tasks. Depending on the package you choose it can provide insights into your business’ financial health and account balances, track cash flow, allow you to keep a record of transactions, run reports, manage contacts, create purchase orders, issue invoices, and monitor stock levels. What it can’t do is provide you with the tailored analysis and timely advice your business needs to remain compliant, and to evolve and flourish. That is where a real live accountant is vital.
What can accounting software do for my business?
Accounting software provides three key functions:
- Data collection and collation: Fast, simple, intuitive cloud-based data entry and organisation.
- ATO compliance: Integrated tax calculation and assistance with lodgements.
- Reporting: Preparation of the documents and reports your accountant needs in order to be able to review your numbers and provide insights and advice.
Once you’ve input your financial data into your accounting software, the dashboard feature puts your business’ numbers at your fingertips – and those of your accountant – representing that information in a number of ways to support you to make business decisions; from budgeting to performance analysis reports, profit and loss statements, gross profit margin, and project tracking across multiple entities. Provided with these reports, your accountant can advise you on the structuring of your finances, tax planning, tax strategy, and a wide range of business advisory services.
Why do I need an accountant?
If you decide to put in the time, effort and expense of implementing accounting software, it makes sense to put an expert in the driving seat. That’s where your accountant comes in. They’re uniquely qualified to dig into the financial data organised within your accounting package, and to provide analysis and advice to help your business grow and evolve based on your numbers. It’s your accountant’s job to keep up to date with the latest tax rules, regulations and legislation for everyone from small business owners to national and international businesses across the spectrum of Australian industries, to apply that knowledge to your accounts and to ensure you are tax compliant and don’t run into debt with the ATO.
Accounting and taxation errors can be costly, not to mention detrimental to your business. Your accountant has a trained eye for anomalies which makes them an essential safety net, protecting your business against software-user error. Last, but by no means least, an accountant will bring a wealth of experience to your business drawn from years working with businesses like yours, and completely different to yours. The value of this lived experience and third-party perspective can prove significant when you’re looking to grow your business.
As a business owner it can be tempting to try to do it all, but smart entrepreneurs leave the numbers to their accountant and focus their energy on the thing they know best; their own business.
What should I look for in accounting software?
Above all, the accounting software package you choose should be cloud-based. This enables you to access your financials from any device with an internet connection, enables instant data updates that are accessible by all users in real time. Cloud-based accounting software is collaborative, can be integrated with multiple apps and platforms, including e-commerce accounting, it’s cost-effective, and scalable.
How should I use my accounting software in collaboration with my accountant?
The key here is actually ensuring that your software is user-friendly from your own perspective, and that it is capable of creating the types of financial reports you need to make decisions about your business. If it’s easy and intuitive for you to input the data, that will help to ensure the accuracy of the reports you generate. Your accountant can take it from there, analysing your reporting and providing knowledgeable, compliant accounting advice. Some cloud-based accounting packages like Xero provide help and support including instructional videos and step-by-step articles to help you as you familiarise yourself with their platform.
At Matthews Steer we have a saying: ‘rubbish in, rubbish out’. Basically this means your accounting software is only as good as the data you input. If you make errors, or fail to reconcile things correctly, the reports you generate won’t provide you with accurate information, which can lead to making the wrong decisions for your business.
Investing in really great accounting software is one thing, but human accounting expertise and analysis is essential in order to get the most out of it. Human error is sometimes unavoidable, particularly when you’re dealing with mass data input, so the second pair of eyes offered by an accountant can be invaluable, not to mention the outside perspective they can provide drawn from their experience across different client types and industries.
At Matthews Steer we offer Melbourne-based accounting services and business advisory services that provide a full suite of taxation services, comprehensive business strategy and planning, and meticulous management and measurement of financial performance. We work with our clients to develop effective strategic plans and implement strong financial reporting processes essential to business optimisation. If you think Matthews Steer Accountants and Advisors is the right fit for your Melbourne accounting needs, call us on 03 9325 6300 or email info@matsteer.com.au and a member of our team will contact you.