Do you think rubbish data helps you make good business decisions?
It’s not a trick question.
If you put crap data into your system, you’ll get crap data out. And you’ll make crappy business decisions. Always. There are no short cuts.
Remember – inputting good data will always take less time than unraveling bad decisions based on bad data.
Businesses tend to do a better job of inputting one type of data compared to others. For example, income is usually well documented and is confirmed by the client paying the invoice – so great care is taken.
But when it comes to money you’re paying out, it’s always last minute. So putting it into your accounting system seems like a waste of time, right?
Wrong. Extremely wrong.
There’s a host of inexpensive tools out there to help you scan, save, track and access past invoices. You can use these tools to:
Create rules based on individual suppliers;
Set up pre-coded invoices based on pre-existing rules and use these in your accounting system entry;
Ensure your invoices don’t physically degrade (faded handwriting or receipts, anyone?)
Plus, these systems have been given the thumbs up by the Australian Taxation Office.
If you run a small business there’s no excuse to say data entry is too hard. With a simple tool you can search your accounting program to access the original invoice whenever you need it.
Which payable system should you use?
Receipt Bank is a great program for small business. You can send your receipts and accounts via post, email, smartphone app, Dropbox or upload them directly to the Receipt Bank website. Receipt Bank will extract the data and integrate it into your accounting software. This is the simplest and most cost-effective method for a business wasting time on its payables process.
Invitbox was designed for the hospitality industry. It enables line-by-line, field-by-field data recognition which is great for large, complex invoices with many components, from large suppliers. In short, you can split a SKU code, quantity, price-per-unit and total for each line, and Invitbox will automatically add it to your accounting program.
Typically, we see savings of 70 percent of time on data entry for payables when we put one of the above systems and a cloud accounting program such as Xero in together. We’ve even had clients change their payables officers into revenue generating assets rather than just performing administration.
Large companies with complex supplier invoicing have greater accuracy of data and focus more on the relationships with their suppliers. This can include managing their terms of trade, accurate stock receipt counts and syncing data with their inventory and accounting systems.
These systems are the biggest “no brainer” for the modern business. Accountants should be implementing these for every client to drastically reduce time spent on checking data integrity at year end or any other reporting date.
Accountants should make sure their clients are ahead of the curve, taking care of their business and that you are seen as the business advisor and champion of efficiency in processes.
Remember, accounting by definition is determining the most efficient allocation of scarce and limited resources.
A version of this post first appeared on the Interactive Accounting blog.
Image credit: GoneMovies (Trainspotting)