Ideas Blog

I often get asked how a business can minimise the time spent (and thus money) “doing” their accounts.

The first step is to get online to create access, convenience and remove tasks that you otherwise have to do such as backups, upgrades and installs.

Secondly, and more importantly, you need to change your thinking to “generating” your accounts. You accounts can be a smooth, automated pipeline of transactions. It doesn’t have to be data entered.

Many businesses I meet still “do” their accounts while they should be generating them. This is about connecting and automating your accounts using a variety of techniques that are NOT limited to bigger businesses. The reality is that there will always be an element of data entry but it can be massively reduced to a small fraction of your work-flow.

There really is only 3 ways of generating your accounts. Most other methods are a variation on these themes or a hybrid of them.

We are interested in our customers saving time so if you have any questions post a comment or get in touch. We are firstly in the business of selling time savings, secondary to that is the accounting software.

REAL TIME – Straight through processing

“Are you serious Saasu? I’m a consulting business, it can’t be automated.”

Even a consulting businesses where you would think it’s hard to automate you can achieve 60-80% automation of transactional work flow. If you think about it (look at your statements), you pay for the same things over and over. Mobile, phone, internet, rent, electricity, wages etc. Often the frequency is consistent and it may only be the amount that varies. These transactions can all be automated to the point where there is no data entry (constant amount) or a followup edit (change amount). Expenses on credit cards can be captured by importing credit card data and bank statements. You simply clear what isn’t needed and apply account codes to the remainder.

This is the best by far on a cost per transaction capture analysis we’ve done of the variety of methods. We call this “exceptions based accounting”.

Highly transactional business models should automate as much as they can using recurring Sales and Purchases for all your normal recurring revenue and fixed costs. If applicable, connect your point-of-sale (POS), e-commerce website, project management and CRM systems to Saasu via the API or using a Connector. Transactions can occur in real time automatically. Contacts can update across systems. New customers can be created, invoiced, payment processed and emailed paperwork automatically without human cost, resources and risk.

Saasu provides customers with shopping carts, software connectors and payment gateway connections to assist in creating a straight through processing business model.

NEXT DAY – Feeds and Import

This method works well for micro enterprise but starts to fall apart as you grow the business or as your business becomes more technically complex. e.g. inventory, time and project based businesses. It doesn’t scale for complexity or compliance.

Under this method you export you bank statement from online banking and import it into your accounting file. Nearly all accounting systems have this feature including Saasu, Sage and Quickbooks. Systems like Banklink and Xero have taken it a step further by providing a service to do this import step for you on a next business day basis or weekly basis. For micro a enterprise this is about an extra $360 per year above Saasu’s pricing. Bank fees may also be charged by your bank account on a per-transaction basis for data feeds. Feeds aren’t real time but they are convenient and close enough for micro businesses. To a degree you are trusting the bank or card company’s data to be correct.

DELAYED – Data entry

Data entry is by far the most expensive and unfortunately the most common. Data entry should be about exceptions so bookkeeper and accountant skills can be reserved for advice and higher level tasks. A good bookkeeper is the difference between order and disorder, fear and anxiety. Automate as much as possible and have your bookkeeper or admin staff be you assistant CFO to your business rather than spend your dollars on them just doing mundane data-entry that can be done by a computer.

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Wouldn’t you love to pay lots of bill at once?

Saasu has released our Direct-to-Bank File (DTB) payment feature. Simply (a) tick all the unpaid purchases you would like to pay in your Saasu Purchase List, (b) create and save your payment and (c) click the icon/link that becomes available to create the direct to Bank File and save it to your desktop.

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With around 2 million small businesses in Australasia it is no surprise that proven models are being sold as franchises. Nor is it a surprise that the franchise segment is a huge growth area for Saasu at the moment.

The key driver is flexibility and scalability- the ability to work across one or one thousand small businesses easily.

Franchise owners typically don’t want to waste time setting up financial systems that might be incompatible with the umbrella/parent franchisor network. Similarly the umbrella network managers don’t want hundreds of franchisees running their businesses on different systems so collating management information is difficult or nearly impossible.

This is where Saasu has found our sweet spot in Australia and increasingly in New Zealand and other countries.

There are no other systems on the market we are aware of that have the same level of multi-user, multi-business, single login, flexibility as we offer for franchise owners and franchisors to co-operate at different levels and get real-time business information across one or one thousand businesses.

One login can access multiple businesses and the business owner can set varying levels of access for different users. Each business can be configured differently for chart of accounts etc yet still roll up consistently formatted reports for the franchisor in PDFs or spreadsheets to email or even better with online login direct access.

Franchisees should just try it by logging in for the free version and if they like it sign up.

Franchisors should contact us or one of our partners to discuss strategies for migration, co-branding and lots more.

Franchise advisors and lenders (capital providers) can also benefit immensely from the ease with which they can monitor business performance remotely and even benchmark across businesses.

There are many methods for reducing input errors in your online accounting file. Accountants use workflow processes that they know will create more predictable accuracy. Learning about some of these and adopting them in your accounting routine is a good investment in time that will reward you for many years to come. Some of these methods are discussed below, however there are many more:

Basic review of your transaction listings

As you create transactions they will appear in your transaction list for the date period applicable. The process is usually to Add a new transaction to the List, Save and Close the transaction and then check the transaction for correctness. You cannot check all the detail for transaction but the main items such as Date, Amount and Contact can be verified. This is the most basic and quickest, but least thorough, of checks you can do.

Review of your Transactions by Account report

This is a good report for checking you have used correct tax codes and ensuring you have chosen the correct Account for you transactions. You might scan the report to ensure that (for example) all your sales appearing in an Account for Income: light fittings would have the same tax code. You might also check that there aren’t any stray transactions in this Account that shouldn’t be there.

Use the duplicate function for adding transactions

When you use the Duplicate button on any Add/Edit Transaction screen you are creating an exact copy of the transaction you are viewing with a few fields cleared like the Date for example. This helps produce consistency in your transaction adding over time as you will be using the same Account, Tax Codes and Summary as you are duplicating the information not entering it.

Use Transactions Lists to help in adding transactions

A good example of this is when you have regular periodical payments you make for things such as subscriptions, rent, bank fees that are often the same each month except for the transaction date.

1. Load the Transactions for a Contact and click the plus icon next to the transaction to load a duplicate.
2. Then you can include the date for this new transaction and amend any other differences (eg. Summary..”Jul08 rent” to “Aug08 Rent”) and then save the transaction.

Use the Transaction Lists to help in adding transactions

As in the above example you can create a list of transaction for the previous month (or period). Use the same process to create new transactions for the new month (or period).

Additional

Make sure you have paperwork, invoices, and bank statements to back up you data entry. Just assuming these things will happen each month (or period) doesn’t mean they actually do!

Here’s some ideas to help save some time -

• Group Pays for processing payroll – Speed up you payroll processing.
  Less data entry
• Fixed bank fee (annual) – Many banks will offer an annual bank fee as one payment instead of the usual monthly fees
  Less data entry and reconciliation entries
• Fixed bank fee (monthly) – those intra-month fees for ATM and Internet Banking usage can oftne be paid as a fixed monthly fee in some business accounts.
  Less data entry and reconciliation entries
• Pay multiple bills from one vendor all at once – This is possible with vendors who have longer payment terms. If you can get vendors to stretch their terms to 3 months from the usual 7 to 30 days then at least you reduce the payment processing work when you write one cheque, or process one payment, for a set of invoices.
  Less paperwork and data entry. In the USA this is paying on Bill/Statement rather than per Invoice
• Dealing with vendors who insist on onerous paperwork – If you receive an excessive number of documents from a vendor, which may include; statements, invoices, reminders and other forms of vendor communication.
  Consider this time cost they are imposing on your business. Some courier companies bill weekly while others are monthly
• Underestimating the cost of processing a transaction – If processing payment early saves you time, and that time value in dollars outweighs the funding cost of spending your cash early then it may pay to clear the payment paperwork earlier.
  A classic example is very small reseller/commission payments
• Buying multiple services/products from one vendor – If you can obtain a discount for buying more products from one source, receive less paperwork, reduce your payment processing work and obtain more lenient terms then this may work for you. Again there are many flow-on advantages like shorter bank statements and less reconciliation’s work results in time cost savings.
  A classic example is with stationary suppliers. Many businesses deal with 3 or more stationary companies. If this saves you lots of money then excellent! If not why put up with the extra paperwork?
• Generally employee expenses are time expensive – Setting up a Motor Vehicle fuel account may be easier than managing those payments as reimbursements through salary or organising lots of paper receipts every month.
  Some companies pay employees slightly more and have their employees account for and claim minor work expenses through personal tax

Many small business use the Just-In-Time approach to payment processing and invoice issuing. This means writing cheques, using a credit card or paying online when vendors start demanding payment or when a bill reminder comes in. This can work when your cashflow is tight. A method that may appeal to some small businesses or investors (but not all) is a Payment Centric method. In a nutshell you choose a frequency that you plan to make payments (or issue invoices), you then write your cheques or process your Bpays, and book the transactions in your accounting system, all on one day. Let’s call this the ‘accounts day’. Then you don’t touch the accounts until the next assigned ‘accounts day’.

With any business system or procedure it’s a case of what works best for your specific needs. Who are the experts at processing and doing accounts efficiently? Accountants must be on this list. They are not just there for tax advice.

We have a listed a few pro’s and con’s that you might like to consider.

Why does this work?

• Get all your cheques prepared and then signed in one session by the cheque writer or cheque signatory.
• Allows you to use Internet banking templates to process multiple payments on that day.
• It may help to manage you cashflow in a more predictable way. e.g. If you know that the 5th of each month is payment processing day and you have $X dollars to make your payments then cashflow becomes more predictable.
• Doing a task 20 times in one sitting is nearly always more efficient than doing 1 task over 20 sittings.
• When you do everything on one day, filing is a lot easier.
• Your vendors and customers will find your organisation more predictable and professional.
• Your work colleagues and employees will know that its the ‘accounts’ day. You can deal with it on that day rather than interrupting work.
• If you have a bookkeeper or a bookkeeping company to do this work, it will nearly always be cheaper to have them in for one full day, rather than have them in spasmodically over time.
• Your Profit and Loss and Cash Flow reports (and others), may end up cleaner and clearer.

When doesn’t it work?

• When the gaps between ‘accounting days’ are set too far apart your management information may get out of date, your vendors may get impatient and you might hate the idea of spending a whole day just doing ‘accounts’. Select a frequency that suits your business model from a holistic perspective.
• When your customer insists on invoices immediately or very regularly. Note that there are legislated requirements for invoices to be issued within a certain time after services have been provided.
• When vendors insist on getting cash on delivery
• When you forget to pay a vendor then they have to wait until your next ‘accounts day’. This can really upset vendors. Then they might charge you more. Ouch!