In a recent article published by Dynamic Business, our very own Alexander Laureti was asked to provide his insight on how SMBs can choose the right accounting software for their needs.
As part of his response, Alexander briefly touched on the importance of maximising the efficiency of your accounting system as well – something that we actively encourage here at LMS Advisory.
“The key to success lies in setting up your file correctly—tailored chart of accounts, bank feeds, regular reconciliations, training, and the right apps. Consult your accountant/bookkeeper for guidance, as they can help maximise your system’s efficiency, saving you time and money.”
Given the significance of this point, we’ve decided to put together our own guide detailing not only how you can choose the right accounting software for your business, but, more importantly, how to make sure you’re getting the most out of it at all times.
Even if you’re an SMB that’s already got your accounting software set up and in place, this article will help you to better understand whether or not you’re getting the most out of your system – and if not, how you can change that.
Let’s dive in.
What accounting software options are available in Australia?
Essentially, Australian businesses have three accounting platforms to choose from:
Typically, most SMBs in Australia will work with either Xero or MYOB, while QuickBooks is more of a low-cost alternative that can suit some smaller businesses.
- Xero boasts a huge ecosystem of apps and integrations and tends to be better for businesses looking to expand internationally or that work in an industry where there is a large number of software platforms to tap into.
This means if your business is looking to grow quickly and aggressively, you’re probably better off with Xero. - Meanwhile, MYOB is better suited for users who just want to have a happy business. It’s reasonably easy to set up and navigate, offers a range of complimentary apps and is quite a popular option amongst many SMBs right across the country.
While some larger businesses may eventually outgrow Xero or MYOB and have to start looking at Enterprise Resource Planning (ERP) systems, most will find that either of these two platforms will cover their ongoing business needs.
Which accounting platform is best for you?
In general, there’s not one option that’s better than the other.
Rather, it all comes down to your SMB’s unique circumstances and situation.
However, there are a few simple questions you can ask yourself to help make the right decision:
- What software are we currently using in our business?
- Which platform is going to better integrate with our specific software stack?
- What are our future plans for the business?
Often, it comes down to whether the industry-specific programs you use will play nicely with either Xero or MYOB. If they only work with one, then your answer is pretty simple.
Similarly, as we mentioned earlier, if you’re planning to scale and go international, then Xero might be better for you. If not, maybe MYOB will do the job.
Ultimately, the right choice will come from considering each option in line with your business needs.
How do you know if you are getting the most out of your accounting software?
If you’re already using accounting software and you’re wondering whether you’re really using it to its full potential, consider this:
If we were to come and ask you how your business did last month, and you couldn’t give us a clear answer, then you’re not getting enough financial insight or information from your software.
In other words, you’re not using the software as well as you could be, and you need to fine-tune your approach to achieve real success.
Unfortunately, we see so many businesses who still make big decisions based on figures like gross income alone, simply because their software is not providing them with enough information.
This is despite the fact they’re yet to pay their bills or even collect the money that’s owed to them (always remember: the job is not complete until you’ve been paid).
Even if you’re still choosing the right software for your business, it’s important to keep all of this in mind as you go about setting it all up.
So, what can you do to help get the most out of your software?
Essentially, it’s important to understand exactly what your system can do for you, then make sure it’s set up to accurately provide you with everything you need to make well-informed business decisions.
While there are several different approaches you can take to finetune your accounting system based on your unique business needs, as a rule, your system should be able to do at least 70-80% of the work for you. Any less, and you’re missing out.
For example, if you’re using MYOB or Xero and you’re not invoicing through it, or you’re still using a spreadsheet to track certain financials, then that’s a good indication you’re not using your accounting software to the best of its ability – and it’s time to revise your process.
When done correctly, you’ll have this single source of truth that integrates effortlessly with your other key platforms to help bring all your financial data under the one roof.
Remember: it’s important to treat your accounting software as an investment – not a business cost.
By now, you know that if you’re not using your accounting software properly, you’re not going to get the insights you need – and this means accounting firms like us are not going to be able to help you as best as we can either.
That’s why, if you want to get the most out of your software, you need to treat it as an investment, not a cost to your business.
In the same way that an accountant works as an additional member of your team, investing in the right accounting software and learning how to use it properly will provide you with a significant ROI in the form of valuable insights that you can use to make better business decisions.
Yes, your subscription might cost you upwards of $100/month, and as an SMB ourselves, we get that this can be costly. However, if you’re using your software to its full potential, it will well and truly pay itself back in spades each month.
Our team at LMS Advisory can help take your software investment to the next level
Not only will choosing the right accounting software be a great investment for your business, but using it properly will also help build a better working relationship with our team at LMS Advisory as well.
With better access to and oversight of your financial data, we can gain greater insight into how your business is performing and help point you in the right direction towards growth and success
So, if you want to get the most out of your accounting software, or if you’re still unsure and want to ask us a few questions, we’re here for you.
