Xero has introduced the ability for Small and Medium-sized business owners to take charge of their own accounting software. You can now do it all yourself.
However, just because you can, doesn’t mean you should.
There are endless things in the world you can do. However, this doesn’t mean you should do them. Your working time is finite so spending it on tasks that aren’t in the best interests of your business is a trap you need to be aware of.
As an accountant, I have learnt that the vast majority of business owners don’t use the software correctly. Although they have the best intentions to save themselves money by doing it themselves, and giving them more oversight into what is happening, it is not the way we recommend operating this part of your business.
Let’s compare two models:
Model A: The owner/operator of the business codes their own transactions, processes their own payroll, files their own GST, and for the most part just relies on their accountant for end of year financial statements and tax returns. When the accountant receives the data, there’s a high likelihood that there are errors, they then spend a number of hours reversing the incorrect entries, and fixing them up.
Outcome of Model A: 11 months’ worth of reports which may are likely incorrect and may have fundamental errors in them. These can’t provide any real value to the business owner because there is a lack of confidence in the accuracy of the information. The business owner is guiding his business by cash in his business but is lacking valuable insights into the actual performance of their business.
Model B (using Your Finance Team): The full accounting side of the business taken care of by an expert. Peace of mind knowing all transactions are being recorded correctly, filings are being returned to the IRD correctly, and reporting is accurate. YFT then provides you with month end management reports every month which are accurate, relevant, and useful for you to be able to make informed decisions about you business.
Outcome of Model B: A business owner with spare time and mental energy. No longer worrying about the mechanics of the business and instead being able to focus on the bigger picture aided by the useful information and data they are now receiving regularly and consistently. When year end arrives, the financials are tidy and getting the year end process completed is much easier with less stress and issues arising.
The choice lies with you, do you continue spending your valuable time doing work you don’t enjoy and aren’t very good at, or do you offload this completely to an expert, and get back to the work that you know you deliver value in?
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