Wednesday, 20 Jul 2022
The advent of accounting software has brought a revolutionary change in how small businesses in Melbourne manage their financial records. These tools are rapidly gaining mass popularity and becoming an integral part of accounting.
With their dominance and widespread usage, many small firms have started questioning the role of a professional accountant or bookkeeper in a company. Small businesses have limited budgets and want to reduce extra costs.
Thus, they are contemplating whether hiring a bookkeeper has become unnecessary because of the automation facility provided by these tools. It is a valid concern, but the answer to this question needs an explanation.
So, let us help you understand the role of Xero, QuickBooks and a professional bookkeeper or accountant in a business to reach a conclusion.
Xero and QuickBooks are among the most sought-after tools for small business accounting in Melbourne. They can be customised to suit the needs of the business and are easy to install, use, update and manage.
These online tools come with a monthly pricing plan and the cost depends on the growth stage of the business. Here is a list of the advantages that are offered by these accounting tools.
Businesses in Melbourne have to deal with an enormous amount of financial data that keeps accumulating over time. Since it is highly confidential, it needs to be protected and stored safely. Xero and QuickBooks eliminate the stress of saving everything on the office system and safeguard it from malware and cyberattacks.
Xero and QuickBooks create all the financial reports and update the records with every transaction. Since the process is automated, the statements are error-free and accurate. The detailed reports can be accessed by the business owner, a professional bookkeeper in Melbourne, and employees authorised by the company at any time from anywhere through their smartphones.
Automated invoicing ensures that all the clients are billed appropriately and without delay. The invoices are sent digitally with payment options and all the other important details to make payment quick and convenient for the customers.
In addition, Xero and QuickBooks also accept online payments, which reduces the dependency on human intervention. These tools also send up follow-up emails if the payment is not received.
Inventory management can be taxing if the bookkeepers do it manually. The online tools aid the business by ensuring sufficient stock is available at any time. The system tracks and records the information related to the stock keeping unit codes, stock reports, payments to suppliers in Melbourne, placing orders for fresh stock, etc. It makes inventory management a cakewalk and eliminates manual labour.
Xero and QuickBooks allow payroll management and time tracking through the software. They help calculate and file payroll taxes in Melbourne, evaluate the paycheques of the employees, and generate payroll reports.
These tools calculate the taxes quickly and make filing a breeze because all the transactions are meticulously organised and recorded. They help to reduce the tax bill by claiming applicable tax deductions with the help of the records of business expenses. Also, the taxes are paid on time and in compliance with the state laws, so there is no question of penalties or late fees.
If you do not hire a professional bookkeeper in Melbourne to manage your business finances, you will have to do it on your own or delegate the work to a subordinate. However, staying on top of the books, reconciling bank accounts and reducing taxes is not possible without the presence of an expert.
The accounting software cannot offer valuable financial advice or analysis of the reports generated by these tools. Thus, you need a bookkeeper to take care of the following tasks.
Bookkeepers are involved in cash flow forecasting, which gives them an insight into the estimated income and expenditures of business for every month/quarter. They use the data to prepare a budget and maintain optimum balance in the bank account to avoid any deficit. They adopt various cost-cutting measures to ensure the incomings are higher than the outgoings.
Creating a cash reserve for the business is highly significant and a priority of bookkeepers. It saves the company from financial distress in case of unexpected expenditures or an economic downturn, such as the COVID-19 pandemic.
Most small business owners in Melbourne are unaware of the tax deductions that can be claimed to bring down the tax amount and keep paying more than required. However, bookkeepers are well-versed in claiming the applicable concessions and help the business to reduce this cost.
The federal and state governments keep making changes to regulations and businesses need to comply to avoid penalties. Bookkeepers stay abreast with all the latest developments and ensure compliance.
Only expert bookkeepers can offer financial advice that can help the business in Melbourne grow and expand. They guide the business owner in making suitable investments, getting rid of debts quickly and identifying the best lenders with low-interest rates.
Although Xero and QuickBooks make everything automated and simple, they do not offer the best advice for managing capital. Thus, businesses in Melbourne need a bookkeeper or an accountant along with these tools for effective financial management.
These tools make their work more productive by automating labour-intensive and time-consuming tasks and providing ample time to focus on business development.