Moving from Excel to Cloud Accounting
March 9, 2022
When starting, most businesses handle their accounting tasks using Excel. While efficient, it may not support the needs of your growing business.
Since 2000, it has been mandatory for all Australian businesses to add and report GST. As such, many business owners find it much more convenient to record their financial data digitally. However, some are still struggling. To help make the transition to online reporting, this blog outlines:
- Why Excel is less effective for business accounting
- The benefits of online accounting
- Reasons to transfer to online accounting, and;
- How to transition to online accounting
Downsides to using Excel for business accounting
As businesses grow, their taxation reporting requirements become more complex. In many cases, Excel is not designed to handle detailed taxation information. Here are six key reasons to move on to online tax reporting.
#1 Excel requires you to master programming language
As it’s so widely used, business owners often forget how complex Excel is. The program can be quite difficult to master and extremely time consuming. For the novice, it can seem like having to learn a new programming language.
#2 Developing an Excel spreadsheet to suit your financial requirements requires careful preparation
Setting up expense reports and invoice tracking is very time-consuming. Also, you may need to continually change information as you go.
#3 You need a strategy
Excel offers no flexibility to reconfigure data. So, before starting, you need to know exactly how you’ll use the information. You’ll need report names, the cells you want to print and ensure every report is correctly time stamped.
#4 Can’t integrate with other business software
Many Excel users find it incompatible with business needs. It’s extremely difficult to enter large data sets, combine various worksheets or incorporate scripts. Excel does not integrate with other programs you may need to run your business smoothly.
#5 There is no audit trail
This leaves Excel susceptible to fraud. The reason is, it’s very easy to change information and difficult to keep track of who has made the changes.
#6 Transactions are hard to track
Many business financial records contain double entries. Excel does not automatically recognise these. So, rather than helping your business run smoothly, it can make creating financial documents very difficult. This, in turn, can result in providing your accountant with inaccurate records.
Benefits of online accounting
Here are six key reasons to utilise an online accounting system.
#1 Ease of use
A convenient dashboard gives you ready access to all financial data. So, you don’t have to painstakingly enter data manually. With a clear view of your company’s finances, you’ll make well-informed business decisions. This will provide your customers with absolute confidence.
#2 Accurate data
Accounting software keeps your business’ pertinent financial data in the cloud. It automatically feeds bank statement lines into your software. This dramatically reduces data entry requirements and possible mistakes.
#3 Real-time reporting
Get detailed, accurate financial reports whenever you need them. So, you no longer have to wait until the end of the month, or end of the quarter. You can view and share real-time budgets and reports quickly and easily. This also enables you to complete tasks, like sales tax returns in minutes, not hours.
#4 Up-to-date information
Create any information your employees and customers need at a moment’s notice. Your business will be equipped to manage its finances efficiently and accurately. This is crucial during tax time when you need to share your financial information with your accountant. Your tax information will always be up-to-date and easy to share.
#5 A clean audit trail
All the historical information you or your investors require is right at their fingertips. Accounting software creates a clean audit trait that can’t be compromised. And, every business transaction (i.e. sales contracts, employee payments and more) is recorded. A complete audit trait reassures your employees and customers and satisfies the ATO’s requirements.
#6 Syncs with other business software
Using cloud-based software allows you to take advantage of apps to sync with your financial data. Invoicing, inventory management and so much more take the time and frustration out of business accounting.
#7 24/7 access to financial data
Every member of your team can access your data at any time. With cloud software, you can share financial information with your employees, accountant, bookkeeper or financial advisor.
Transitioning to online accounting
Are you ready to make the switch? To reap the above benefits and more, follow these simple tips.
Choose the right time
The end of the financial year may seem like the obvious time to integrate new accounting software. However, this is a very busy period for small business owners. You may not have enough time to integrate the new system and prepare data. So, we advise making the switch during your slower months. This can be the end of the month or quarter, for instance.
Either move your accounting history or enter open balances
Importing historical data or starting over with open balances can be a difficult choice. In most cases, however, moving your entire accounting history isn’t necessary. It’s generally recommended to export it to a backup file, and simply transfer the uncleared transactions.
Organise your data
Different software will support different file formats. The software you choose will specify things like: text limits, date formatting, column headings and more. Ensure your data is error-free, and is saved in the correct format. Test this by transferring a few rows of data, and ensure your formatting is correct before entering the remaining data.
Run both systems simultaneously
Transitioning to your new accounting software takes time. To ensure things go smoothly, run both systems together, until you can use the software confidently. Depending on your business size, you may need to run both systems for a few days or weeks.
Would you like more advice on how Xero accounting software can benefit your business? For specialised training and support in Xero Accounting packages, call or email 360 Accounting Services today.
References:
https://www.goforma.com/small-business-accounting/moving-from-excel-to-accounting-software
https://www.xero.com/au/resources/small-business-guides/accounting/move-from-excel/
https://www.accountingweb.co.uk/community/blogs/robnixon2808/making-tax-digital-from-down-under
Sign up to our
newsletter here!
newsletter here!
Share This Post
Running a small business in Australia is a journey filled with passion, hard work, and countless decisions. Amidst the daily operations, it’s easy to overlook one of the most critical aspects of long-term success: regular financial reviews. These aren't just about crunching numbers; they're about understanding the health of your business, identifying opportunities, and mitigating risks. Why Regular Financial Reviews are Non-Negotiable 1. Informed Decision-Making Without a clear picture of your finances, every business decision becomes a gamble. Regular reviews provide you with the data needed to make informed choices, whether it's about investing in new equipment, expanding your team, or adjusting your pricing strategy. 2. Identifying Trends and Opportunities Financial data often tells a story. By regularly reviewing your income statements, balance sheets, and cash flow reports, you can spot trends in revenue, expenses, and profitability. This allows you to capitalise on growth opportunities and address potential issues before they escalate. 3. Cash Flow Management Cash flow is the lifeblood of any business. Regular reviews help you monitor your cash inflows and outflows, ensuring you have enough liquidity to cover your operating costs and seize opportunities. It can also highlight potential cash flow shortages, giving you time to implement solutions. 4. Budgeting and Forecasting A well-constructed budget is a roadmap for your financial future. Regular reviews allow you to compare your actual performance against your budget, identify deviations, and adjust your forecasts accordingly. This iterative process helps you stay on track and plan more effectively. 5. Tax Compliance and Optimisation Australia's tax landscape can be complex for small businesses. Regular financial reviews, often in conjunction with a qualified bookkeeper or accountant, ensure you're meeting your tax obligations and taking advantage of all available deductions and incentives. 6. Measuring Performance Against Goals Every business sets goals, whether they're related to revenue growth, profit margins, or cost reduction. Financial reviews provide the metrics you need to track your progress and assess how effectively you're achieving your objectives. 7. Early Problem Detection Catching financial problems early can save your business from significant challenges down the line. Whether it's declining sales, increasing expenses, or unexpected liabilities, regular reviews act as an early warning system. How Often Should You Review Your Finances? The frequency of your financial reviews will depend on the size and complexity of your business. However, a good general guideline for most Australian small businesses includes: ● Weekly/Fortnightly: Quick check of cash flow and key performance indicators. ● Monthly: Detailed review of profit and loss, balance sheet, and cash flow statements. ● Quarterly: Comprehensive review, including budget vs. actual analysis, and planning for the next quarter. ● Annually: Year-end review, tax planning, and strategic financial planning for the coming year. Getting Started with Your Financial Reviews If the idea of regular financial reviews feels daunting, consider these steps: Set aside dedicated time: Treat financial reviews as a critical business activity, not an afterthought. Utilise accounting software: Tools like Xero, MYOB, or QuickBooks Online can automate much of the data collection and reporting. Work with a professional: A qualified bookkeeper or accountant can provide invaluable expertise, helping you interpret your data and make sound financial decisions. Regular financial reviews are not a burden; they are an investment in the stability and growth of your Australian small business. By making them a consistent part of your business routine, you empower yourself with the knowledge and insights needed to navigate challenges and seize opportunities, ensuring a healthier financial future. For more information on how we can assist with your financial reviews and bookkeeping needs, please contact us at https://www.360accountingservices.com.au
Staying Organised: Financial Document Management Tips In today's fast-paced world, keeping your financial documents in order can seem like a daunting task. However, proper financial document management is crucial for everything from tax season to personal financial planning. This blog post will provide you with practical tips to help you stay organised and on top of your finances. Why is Financial Document Management Important? Effective financial document management offers several benefits: ● Easier Tax Preparation: Having all your documents readily available makes tax season less stressful and reduces the chances of errors. ● Improved Financial Planning: A clear overview of your financial records allows for better budgeting and future planning. ● Protection Against Fraud: Organised documents can help you quickly identify and report suspicious activity. ● Access to Important Information: Whether it's for a loan application or an insurance claim, quick access to your documents is invaluable. Essential Tips for Financial Document Management 1. Digitise Your Documents One of the most effective ways to manage your financial documents is to go paperless where possible. ● Scan and Save: Use a scanner or a scanning app on your smartphone to convert physical documents into digital files. Save them in a secure, cloud-based storage system like Google Drive or Dropbox. ● E-Statements: Opt for electronic statements from your bank, credit card companies, and utility providers. This reduces paper clutter and often provides immediate access to your statements. 2. Create a Consistent Filing System Whether you prefer physical or digital files, a consistent and logical filing system is key. ● Categories: Create clear categories for your documents, such as: ○ Bank Statements ○ Credit Card Statements ○ Loan Documents ○ Investment Records ○ Tax Documents ○ Insurance Policies ○ Utility Bills ● Sub-Categories: Within each category, consider sub-categories by year or type. ● Naming Convention (Digital): For digital files, use a consistent naming convention (e.g., "Bank_Statement_2025_October"). 3. Implement Regular Review and Purge Cycles Don't let documents pile up. Schedule regular times to review and purge unnecessary papers and files. ● Monthly Review: Dedicate an hour each month to sort through new documents, file them, and shred anything you no longer need. ● Annual Purge: Before the end of the year, do a comprehensive review of all your financial documents. Dispose of anything that has exceeded its retention period. 4. Secure Your Documents Protecting your financial information is paramount. ● Physical Documents: Store important physical documents (e.g., property deeds, birth certificates) in a fireproof safe or safety deposit box. ● Digital Documents: ○ Use strong, unique passwords for your online accounts and cloud storage. ○ Enable two-factor authentication (2FA) wherever possible. ○ Back up your digital files regularly to an external hard drive or another secure cloud service. 5. Know What to Keep and For How Long It's important to understand the retention periods for different types of financial documents. Document Type Tax Returns & Records Bank Statements Credit Card Statements Loan Documents Investment Statements Insurance Policies Utility Bills Property Deeds 6. Utilise Financial Management Software Consider using personal finance software or apps to help track expenses, manage budgets, and even link to your bank accounts for automated categorisation. This can significantly reduce the amount of manual organisation required. Conclusion Organising your financial documents doesn't have to be overwhelming. By implementing these tips – digitising, creating a consistent filing system, regular reviews, securing your information, and understanding retention periods – you can achieve a more streamlined and less stressful approach to financial management. Start today, and give yourself the peace of mind that comes with being financially organised. For more financial tips and advice, subscribe to our newsletter and follow us on social media!
Simple Financial Habits for Business Owners Running a business comes with a myriad of responsibilities, and sometimes, financial management can feel overwhelming. However, by adopting a few simple financial habits, business owners can maintain better control over their finances, ensure long-term stability, and reduce stress. This blog post will outline some essential practices that can make a significant difference. 1. Separate Business and Personal Finances This is perhaps the most fundamental rule for any business owner. Commingling funds can lead to confusion, complicate tax filings, and make it difficult to accurately assess your business's financial health. ● Open Separate Accounts: Set up distinct bank accounts and credit cards for your business. ● Avoid Personal Expenses from Business Accounts: Even small, seemingly insignificant personal purchases from your business account can create headaches. ● Pay Yourself a Salary: Treat yourself as an employee of your business and pay yourself a regular salary. 2. Track All Income and Expenses Accurate record-keeping is crucial for understanding where your money comes from and where it goes. This information is vital for budgeting, forecasting, and tax preparation. ● Use Bookkeeping Software: Invest in reliable accounting software like MYOB, Xero, or QuickBooks. These tools automate many tasks and provide clear financial reports. ● Categorise Transactions: Consistently categorise your income and expenses. This helps you identify spending patterns and areas for improvement. ● Keep Receipts: Digitise or keep physical copies of all business-related receipts. This is essential for auditing and expense verification. 3. Regular Review of Financial Statements Don't just record transactions; understand what they mean. Regularly reviewing your financial statements will provide insights into your business's performance. ● Profit and Loss (P&L) Statement: Review your P&L monthly to see your revenues, costs, and profits. ● Balance Sheet: Check your balance sheet quarterly to understand your assets, liabilities, and equity. ● Cash Flow Statement: Analyse your cash flow regularly to ensure you have enough liquidity to meet your obligations. 4. Create and Stick to a Budget A budget is your financial roadmap. It helps you allocate resources effectively, prevent overspending, and work towards your financial goals. ● Develop a Realistic Budget: Base your budget on historical data and realistic projections. ● Monitor and Adjust: Regularly compare your actual spending to your budget and make adjustments as needed. ● Allocate Funds for Taxes: Set aside a portion of your income for taxes, as estimated taxes can be a significant surprise if not planned for. 5. Build an Emergency Fund Just like personal finances, businesses need an emergency fund to weather unexpected challenges, such as a sudden drop in sales, equipment breakdown, or economic downturns. ● Set a Target: Aim to have at least 3-6 months of operating expenses saved. ● Automate Savings: Set up automatic transfers from your operating account to your savings account. 6. Regularly Reconcile Bank Statements Bank reconciliation ensures that your internal records match your bank statements. This helps catch errors, detect fraud, and verify the accuracy of your books. ● Monthly Reconciliation: Reconcile your bank accounts and credit card statements every month. ● Investigate Discrepancies: Promptly investigate any differences between your records and the bank's records. 7. Seek Professional Advice While these habits provide a strong foundation, there will be times when you need expert guidance. ● Consult a Bookkeeper or Accountant: A professional bookkeeper or accountant can help set up your systems, ensure compliance, and provide strategic financial advice. ● Tax Planning: Work with a tax professional to optimise your tax strategy and ensure you're taking advantage of all eligible deductions. By consistently practicing these simple financial habits, business owners can gain a clearer picture of their financial health, make informed decisions, and pave the way for sustainable growth. Start implementing these habits today, and watch your business thrive. For more detailed guidance and personalised support, contact us at 360 Accounting Bookkeeping Services. We're here to help your business succeed. Contact Us: Phone: Parikshit Kikla (PK) Email: pkikla@360accountingservices.com.au Website: https://www.360accountingservices.com.au/
Running a small business in Australia is a journey filled with passion, hard work, and countless decisions. Amidst the daily operations, it’s easy to overlook one of the most critical aspects of long-term success: regular financial reviews. These aren't just about crunching numbers; they're about understanding the health of your business, identifying opportunities, and mitigating risks. Why Regular Financial Reviews are Non-Negotiable 1. Informed Decision-Making Without a clear picture of your finances, every business decision becomes a gamble. Regular reviews provide you with the data needed to make informed choices, whether it's about investing in new equipment, expanding your team, or adjusting your pricing strategy. 2. Identifying Trends and Opportunities Financial data often tells a story. By regularly reviewing your income statements, balance sheets, and cash flow reports, you can spot trends in revenue, expenses, and profitability. This allows you to capitalise on growth opportunities and address potential issues before they escalate. 3. Cash Flow Management Cash flow is the lifeblood of any business. Regular reviews help you monitor your cash inflows and outflows, ensuring you have enough liquidity to cover your operating costs and seize opportunities. It can also highlight potential cash flow shortages, giving you time to implement solutions. 4. Budgeting and Forecasting A well-constructed budget is a roadmap for your financial future. Regular reviews allow you to compare your actual performance against your budget, identify deviations, and adjust your forecasts accordingly. This iterative process helps you stay on track and plan more effectively. 5. Tax Compliance and Optimisation Australia's tax landscape can be complex for small businesses. Regular financial reviews, often in conjunction with a qualified bookkeeper or accountant, ensure you're meeting your tax obligations and taking advantage of all available deductions and incentives. 6. Measuring Performance Against Goals Every business sets goals, whether they're related to revenue growth, profit margins, or cost reduction. Financial reviews provide the metrics you need to track your progress and assess how effectively you're achieving your objectives. 7. Early Problem Detection Catching financial problems early can save your business from significant challenges down the line. Whether it's declining sales, increasing expenses, or unexpected liabilities, regular reviews act as an early warning system. How Often Should You Review Your Finances? The frequency of your financial reviews will depend on the size and complexity of your business. However, a good general guideline for most Australian small businesses includes: ● Weekly/Fortnightly: Quick check of cash flow and key performance indicators. ● Monthly: Detailed review of profit and loss, balance sheet, and cash flow statements. ● Quarterly: Comprehensive review, including budget vs. actual analysis, and planning for the next quarter. ● Annually: Year-end review, tax planning, and strategic financial planning for the coming year. Getting Started with Your Financial Reviews If the idea of regular financial reviews feels daunting, consider these steps: Set aside dedicated time: Treat financial reviews as a critical business activity, not an afterthought. Utilise accounting software: Tools like Xero, MYOB, or QuickBooks Online can automate much of the data collection and reporting. Work with a professional: A qualified bookkeeper or accountant can provide invaluable expertise, helping you interpret your data and make sound financial decisions. Regular financial reviews are not a burden; they are an investment in the stability and growth of your Australian small business. By making them a consistent part of your business routine, you empower yourself with the knowledge and insights needed to navigate challenges and seize opportunities, ensuring a healthier financial future. For more information on how we can assist with your financial reviews and bookkeeping needs, please contact us at https://www.360accountingservices.com.au
Staying Organised: Financial Document Management Tips In today's fast-paced world, keeping your financial documents in order can seem like a daunting task. However, proper financial document management is crucial for everything from tax season to personal financial planning. This blog post will provide you with practical tips to help you stay organised and on top of your finances. Why is Financial Document Management Important? Effective financial document management offers several benefits: ● Easier Tax Preparation: Having all your documents readily available makes tax season less stressful and reduces the chances of errors. ● Improved Financial Planning: A clear overview of your financial records allows for better budgeting and future planning. ● Protection Against Fraud: Organised documents can help you quickly identify and report suspicious activity. ● Access to Important Information: Whether it's for a loan application or an insurance claim, quick access to your documents is invaluable. Essential Tips for Financial Document Management 1. Digitise Your Documents One of the most effective ways to manage your financial documents is to go paperless where possible. ● Scan and Save: Use a scanner or a scanning app on your smartphone to convert physical documents into digital files. Save them in a secure, cloud-based storage system like Google Drive or Dropbox. ● E-Statements: Opt for electronic statements from your bank, credit card companies, and utility providers. This reduces paper clutter and often provides immediate access to your statements. 2. Create a Consistent Filing System Whether you prefer physical or digital files, a consistent and logical filing system is key. ● Categories: Create clear categories for your documents, such as: ○ Bank Statements ○ Credit Card Statements ○ Loan Documents ○ Investment Records ○ Tax Documents ○ Insurance Policies ○ Utility Bills ● Sub-Categories: Within each category, consider sub-categories by year or type. ● Naming Convention (Digital): For digital files, use a consistent naming convention (e.g., "Bank_Statement_2025_October"). 3. Implement Regular Review and Purge Cycles Don't let documents pile up. Schedule regular times to review and purge unnecessary papers and files. ● Monthly Review: Dedicate an hour each month to sort through new documents, file them, and shred anything you no longer need. ● Annual Purge: Before the end of the year, do a comprehensive review of all your financial documents. Dispose of anything that has exceeded its retention period. 4. Secure Your Documents Protecting your financial information is paramount. ● Physical Documents: Store important physical documents (e.g., property deeds, birth certificates) in a fireproof safe or safety deposit box. ● Digital Documents: ○ Use strong, unique passwords for your online accounts and cloud storage. ○ Enable two-factor authentication (2FA) wherever possible. ○ Back up your digital files regularly to an external hard drive or another secure cloud service. 5. Know What to Keep and For How Long It's important to understand the retention periods for different types of financial documents. Document Type Tax Returns & Records Bank Statements Credit Card Statements Loan Documents Investment Statements Insurance Policies Utility Bills Property Deeds 6. Utilise Financial Management Software Consider using personal finance software or apps to help track expenses, manage budgets, and even link to your bank accounts for automated categorisation. This can significantly reduce the amount of manual organisation required. Conclusion Organising your financial documents doesn't have to be overwhelming. By implementing these tips – digitising, creating a consistent filing system, regular reviews, securing your information, and understanding retention periods – you can achieve a more streamlined and less stressful approach to financial management. Start today, and give yourself the peace of mind that comes with being financially organised. For more financial tips and advice, subscribe to our newsletter and follow us on social media!
Simple Financial Habits for Business Owners Running a business comes with a myriad of responsibilities, and sometimes, financial management can feel overwhelming. However, by adopting a few simple financial habits, business owners can maintain better control over their finances, ensure long-term stability, and reduce stress. This blog post will outline some essential practices that can make a significant difference. 1. Separate Business and Personal Finances This is perhaps the most fundamental rule for any business owner. Commingling funds can lead to confusion, complicate tax filings, and make it difficult to accurately assess your business's financial health. ● Open Separate Accounts: Set up distinct bank accounts and credit cards for your business. ● Avoid Personal Expenses from Business Accounts: Even small, seemingly insignificant personal purchases from your business account can create headaches. ● Pay Yourself a Salary: Treat yourself as an employee of your business and pay yourself a regular salary. 2. Track All Income and Expenses Accurate record-keeping is crucial for understanding where your money comes from and where it goes. This information is vital for budgeting, forecasting, and tax preparation. ● Use Bookkeeping Software: Invest in reliable accounting software like MYOB, Xero, or QuickBooks. These tools automate many tasks and provide clear financial reports. ● Categorise Transactions: Consistently categorise your income and expenses. This helps you identify spending patterns and areas for improvement. ● Keep Receipts: Digitise or keep physical copies of all business-related receipts. This is essential for auditing and expense verification. 3. Regular Review of Financial Statements Don't just record transactions; understand what they mean. Regularly reviewing your financial statements will provide insights into your business's performance. ● Profit and Loss (P&L) Statement: Review your P&L monthly to see your revenues, costs, and profits. ● Balance Sheet: Check your balance sheet quarterly to understand your assets, liabilities, and equity. ● Cash Flow Statement: Analyse your cash flow regularly to ensure you have enough liquidity to meet your obligations. 4. Create and Stick to a Budget A budget is your financial roadmap. It helps you allocate resources effectively, prevent overspending, and work towards your financial goals. ● Develop a Realistic Budget: Base your budget on historical data and realistic projections. ● Monitor and Adjust: Regularly compare your actual spending to your budget and make adjustments as needed. ● Allocate Funds for Taxes: Set aside a portion of your income for taxes, as estimated taxes can be a significant surprise if not planned for. 5. Build an Emergency Fund Just like personal finances, businesses need an emergency fund to weather unexpected challenges, such as a sudden drop in sales, equipment breakdown, or economic downturns. ● Set a Target: Aim to have at least 3-6 months of operating expenses saved. ● Automate Savings: Set up automatic transfers from your operating account to your savings account. 6. Regularly Reconcile Bank Statements Bank reconciliation ensures that your internal records match your bank statements. This helps catch errors, detect fraud, and verify the accuracy of your books. ● Monthly Reconciliation: Reconcile your bank accounts and credit card statements every month. ● Investigate Discrepancies: Promptly investigate any differences between your records and the bank's records. 7. Seek Professional Advice While these habits provide a strong foundation, there will be times when you need expert guidance. ● Consult a Bookkeeper or Accountant: A professional bookkeeper or accountant can help set up your systems, ensure compliance, and provide strategic financial advice. ● Tax Planning: Work with a tax professional to optimise your tax strategy and ensure you're taking advantage of all eligible deductions. By consistently practicing these simple financial habits, business owners can gain a clearer picture of their financial health, make informed decisions, and pave the way for sustainable growth. Start implementing these habits today, and watch your business thrive. For more detailed guidance and personalised support, contact us at 360 Accounting Bookkeeping Services. We're here to help your business succeed. Contact Us: Phone: Parikshit Kikla (PK) Email: pkikla@360accountingservices.com.au Website: https://www.360accountingservices.com.au/
