Imagine you’ve unknowingly parked under a tree full of birds, who all decide to use your windscreen for target practice. By the time you hop back in your car is covered in so much crap you can barely see the road, let alone what’s coming up ahead.
Now, would you start the engine and drive away?
You may think it’s a stupid question to ask. Of course you wouldn’t. That would be dangerous. But as we mentioned in our previous post of things that Business Owners need to implement to be successful, many businesses operate just as dangerously because their financial reports and forecasts aren’t up-to-date.
Most accountants report on and deliver to clients using data that can be more than 11 months old.
It’s true. When accountants prepare a business’ End-Of-Year financials for June, they typically use bookkeeping records up to May the following year. And if the accountant provides any additional value (other than lodging the tax return), their advice is based made from the figures reported in these financials.
Ignoring everything that changed between July and May–practically an entire year.
As business owners, we often look to our accountants for advice. But if that advice comes only once a year, based on what may well be year-old data, how can we reliably hit our targets?
Fortunately for our business clients, Inspire CA takes advantage of a tool that can significantly improve report turnaround times.
The key to having live and (almost) real-time financial data is cloud-based accounting software. And that’s where our business clients have the advantage, because they all use Xero. We are solely Xero accountants.
Xero can connect directly with their bank, and receive expense information from photo-recognition data entry software and other add-ons to automate and streamline their reporting.
And because Xero is cloud-based, their data is never more than a few days old and can be reconciled quickly and easily each day, ready for reporting.
Another great benefit is their advisers can access the reporting and data just as easily. And as an adviser, there’s nothing like being able to run your eyes over a client’s reports and call to either congratulate them or see how things are going (depending on the figures).
It’s vital to know what’s happening in the business world in real-time. Trends are shifting more and more quickly, and you need to know how your business is performing and responding to internal and external forces. It’s the only way you can make clear financial decisions.
And that’s what makes cloud-based accounting such a smart business decision.
How many days after the month is over do you get your reports? If it’s more than 30 days, things really needs to improve. If you’re thinking about outsourcing your monthly bookkeeping, aim to have them ready no later than two weeks after the month is over. And if you’re doing your own bookkeeping, you should finish reconciling them within a week.
Hopefully I’m preaching to the converted. But if you haven’t switched to cloud-based accounting software, do it now. You’ll have the information you need to make important decisions in real time.
Which is a lot better than trying to drive with business crap all over your windscreen.
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