2nd October, 2024
In today’s fast-paced business environment, Australian business owners need to stay on top of their finances more than ever.
Enter real-time accounting — a game-changer that’s revolutionising how entrepreneurs can manage their books.
It’s time to explore what this means for your business and how to leverage it for success.
Real-time accounting refers to the practise of recording and accessing financial information as it happens, rather than waiting for monthly or quarterly updates to be generated.
This means your financial data — from sales and expenses to cashflow and profitability — is current and accessible at any given moment.
It’s like having a live feed of your business’s financial health 24/7, allowing you to instantly take the pulse of your operations.
Real-time data offers many benefits that can greatly impact your company’s success and growth. For example:
One of the biggest advantages of real-time accounting is the ability to monitor your cash position constantly.
This ongoing visibility helps you avoid cash crunches, manage your working capital more effectively, and make informed decisions about when to pay bills or chase outstanding invoices.
With up-to-date information at your fingertips, you can make quick, informed decisions about all sorts of different business operations.
Whether it’s deciding on a new investment, adjusting your marketing budget, or managing your workforce, real-time data provides the insights you need to act confidently and not threaten your firm’s cashflow.
Real-time data allows you to identify and address financial issues before they become major problems.
For instance, you could immediately spot a sudden drop in sales or an unexpected increase in expenses, rather than discovering it weeks or months later when it’s potentially too late to take corrective action.
Accurate, current data leads to more reliable financial projections, too.
When working with real-time information, your forecasts are based on the most up-to-date figures, making them more accurate and useful for planning purposes.
This data can also be handy when you’re applying for loans or other financing and need to supply financial projection data.
In today’s always-changing world, agility is crucial for businesses, no matter their industry or size.
Real-time financial insights allow you to respond swiftly to market changes or opportunities.
Rather than relying on outdated information, you can quickly adjust your strategies based on current performance.
Implementing real-time accounting doesn’t have to be complicated. Here are some practical tips to get you started:
The foundation of real-time accounting is cloud-based software.
Platforms such as MYOB’s excellent solutions offer real-time capabilities that are perfect for Australian businesses of all types.
MYOB’s user-friendly systems update automatically, providing current financial information wherever you are, whether in the office, at home, or on the go.
Connecting your business bank accounts to your accounting software is a crucial step.
Chris McComb, a Subject Matter Expert in Small Business Accounting at MYOB, says, “Bank feeds are a game changer because a daily upload of bank transactions can be automatically allocated by bank rules or auto-matching.”
Bank feeds ensure transactions are recorded as they occur, eliminating the need for manual data entry and reducing the risk of errors.
This automation is key to maintaining real-time financial records and keeping all your data current.
Accounting software providers such as MYOB offer mobile apps, which are invaluable for real-time accounting.
These apps allow you to record expenses, send invoices, and check your financial position on the go.
This means you can keep your books up-to-date even when you’re away from your desk.
E-invoicing speeds up the payment process thanks to pre-filled fields for your invoices and the ability for clients to pay digitally.
Plus, Chris notes, “MYOB’s digital invoicing solutions include automated reminders to customers, which takes away the need to remember to chase your customers for payment.”
By sending invoices electronically and enabling online payment options, you can see when invoices are viewed, paid, and settled in your account almost instantly.
As a result, you’ll enjoy real-time updates on your accounts receivable throughout the year.
For retail businesses, integrating your POS system with your accounting software provides real-time sales data.
This integration ensures every sale is immediately reflected in your financial records, giving you an accurate, up-to-the-minute picture of your business performance and more helpful information to share with customers.
However, having access to real-time data is only half the battle.
The real value comes from how you use this information. Here are some best practises:
Start each day with a quick review of your cash position.
This daily check-in allows you to make informed decisions about your day-to-day operations, such as whether to delay non-essential expenses or stop work on projects for clients who are yet to pay their bills.
Set aside time each week to analyse your key financial metrics, including profit margins and accounts payable and receivable.
Chris says, “The MYOB dashboard provides real-time understanding of outstanding invoices and bills, GST obligations, superannuation you need to pay, and instant financial reports, among other things.”
Use MYOB’s functions for your regular reviews to spot trends and address issues promptly.
MYOB’s software streamlines the process of managing the bills you need to pay by using OCR (optical character recognition) technology and pre-filled data from contact setups.
“Take photos of bill documents using the MYOB Capture app or send the document via email to the uploads section of your MYOB account,” Chris explains.
“From there, you can select the document and create a bill. The OCR tech will pre-fill what it recognises, such as the supplier name (if this matches an existing contact in your system), the data, invoice number, and amount.”
MYOB has also partnered with some large suppliers (such as Officeworks, Ampol, Reece, and Bunnings) to further automate bill-related data entry thanks to automatic uploads of invoices to your MYOB account.
You simply need to link your supplier account with the partnered business (e.g., Officeworks) and your existing MYOB business file.
All of this makes it quicker and easier to keep your accounting systems up-to-date, so you never suddenly have lots of unexpected expenses to pay or as many errors in your accounting reports.
Plus, Chris recommends MYOB users take advantage of the fact that “each bill creation in MYOB also checks for a valid supplier ABN for GST purposes.”
The system can tell you immediately if the ABN is valid, and you can also learn further information, such as GST registration details, if required.
This handy real-time information boosts financial accuracy for your business and means fewer headaches at tax time and beyond.
Instead of creating a static budget at the start of the year, use your real-time data to adjust your budget on the fly.
This dynamic approach to budgeting allows you to respond to changes in your business environment faster and more effectively.
Generate financial reports for tax purposes, various stakeholders, or to support business decisions.
Real-time data means you don’t have to wait for the month- or year-end to get an accurate picture of your financial position.
Be sure to keep on top of your tax obligations by monitoring your GST liability in real-time.
This ongoing awareness simplifies your BAS lodgements and helps you avoid nasty surprises at tax time.
Use current cost and revenue data to adjust your pricing strategies promptly, such as when the cost of materials rises sharply.
This agility can help you maximise profitability and respond to market changes ASAP.
Real-time data can help optimise stock levels and purchasing decisions for product-based businesses.
You can avoid running out of your most popular items or overstocking by having an up-to-date view of your inventory levels and sales trends.
It’s also a good idea to set financial KPIs and track them in real-time to motivate your team and drive performance.
This immediate feedback loop can significantly improve productivity and help you achieve your business goals faster.
Real-time accounting and financial management practises offer Australian business owners unprecedented insight into their financial position.
While up-to-the-minute data is powerful, it’s how you use this information that truly makes the difference.
Start small, focus on the metrics that matter most to your business, and gradually expand your real-time practises as you become more comfortable with the process.
Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.
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